Date Requested:February 14, 2013
Time Requested:04:41 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R1152 Introduced HB2048
CBD Subject: LEGALIZE FIREWORKS
FUND(S)
Volunteer Fire Department Fireworks Fund
Sources of Revenue
Special Fund
Legislation creates:
A New Fund

Fiscal Note Summary

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

     The stated purpose of this bill is to authorize the sale of fireworks. The bill requires the sales tax on fireworks to be ten percent. The bill creates a special fund that distributes the firework sales tax proceeds equally to each West Virginia volunteer fire department.
    
     As written, this bill would place a 10% sales tax on the sale of fireworks authorized by §29-3-24. The passage of this bill could result in annual revenue of between $1 million and $2 million for the “Volunteer Fire Department Fireworks Fund”.
    
     However, it should be noted that this bill would be in violation of the Streamlined Sales and Use Tax Agreement (SSUTA), of which West Virginia is a member state. The SSUTA restricts member states from having multiple state sales and use tax rates on property or services, with the exception of food and drugs.
    
     There would be a one-time administrative cost of $81,800 to the State Tax Department. Additional costs would be for programming changes and creation of tax returns necessary for this new tax on the sale of fireworks. Thereafter, there would be no additional administrative costs from the passage of this bill.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2013
Increase/Decrease
(use"-")
2014
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 81,800 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 81,800 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
     The stated purpose of this bill is to authorize the sale of fireworks. The bill requires the sales tax on fireworks to be ten percent. The bill creates a special fund that distributes the firework sales tax proceeds equally to each West Virginia volunteer fire department.
    
     As written, this bill would place a 10% sales tax on the sale of fireworks authorized by §29-3-24. The passage of this bill could result in annual revenue of between $1 million and $2 million for the “Volunteer Fire Department Fireworks Fund”.
    
     However, it should be noted that this bill would be in violation of the Streamlined Sales and Use Tax Agreement (SSUTA), of which West Virginia is a member state. The SSUTA restricts member states from having multiple state sales and use tax rates on property or services, with the exception of food and drugs.
    
     There would be a one-time administrative cost of $81,800 to the State Tax Department. Additional costs would be for programming changes and creation of tax returns necessary for this new tax on the sale of fireworks. Thereafter, there would be no additional administrative costs from the passage of this bill.


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov
     The stated purpose of this bill is to authorize the sale of fireworks. The bill requires the sales tax on fireworks to be ten percent. The bill creates a special fund that distributes the firework sales tax proceeds equally to each West Virginia volunteer fire department.
    
     The proposed bill would be in violation of the Streamlined Sales and Use Tax Agreement (SSUTA), of which W.Va. is a member state. The SSUTA restricts member states from having multiple state sales and use tax rates on property or services, with the exception of food and drugs. This bill proposes to have a higher sales tax rate on fireworks than other personal property or services.