Date Requested:February 10, 2012
Time Requested:01:50 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2012R1854 Introduced SB555
CBD Subject: NONPROFIT YOUTH ORGANIZATION
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

     The stated purpose of this bill is to add an exception to the limitation on the right of a contractor to assert sales and use tax exemptions of a purchaser, specifically, when the purchaser is a nonprofit youth organization.
    
     As written, we are unable to accurately estimate the revenue consequences of the proposed pass-through contractor sales tax exemption because of lack of knowledge on the amount of construction contracts and lack of knowledge related to the terms of such contracts. The Boys Scouts of America would already be exempt from tax under current law, but only if they directly purchased their building materials, supplies and equipment rentals.
    
     There would be no additional administrative costs to the State Tax Department.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
     As written, we are unable to accurately estimate the revenue consequences of the proposed pass-through contractor sales tax exemption because of lack of knowledge on the amount of construction contracts and lack of knowledge related to the terms of such contracts. The Boys Scouts of America would already be exempt from tax under current law, but only if they directly purchased their building materials, supplies and equipment rentals.
    
     Based upon Boy Scout projections of $400 million in investment over four years, the net potential tax savings to the Boy Scouts of America related to passage of the bill could be in the $5 million to $10 million range over those four years assuming that the portion attributable to contractor purchases of otherwise taxable building materials, supplies and equipment is no higher than 40 percent of the total value of the contracts.
    
     There would be no additional administrative costs to the State Tax Department.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov