Date Requested:February 16, 2013
Time Requested:11:43 AM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R1730 Introduced HB2229
CBD Subject: PROPANE GAS
FUND(S)
State Road Fund
Sources of Revenue
Other Fund State Road 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 exempt special fuels and propane gas that are used for home heating purposes from the motor fuel excise tax.
    
     As written, the passage of this bill would result in a loss to the State Road Fund of up to $6.0 million per year. This bill provides a refundable exemption from the variable rate component of the Motor Fuel Excise Tax on sales of special fuel and propane for use in private dwellings. However, the bill is very broad in scope since it does not define “private dwelling”. For instance, it is unclear whether fuel used to heat a commercial apartment dwelling would be allowed a refund of the gasoline sales tax.
    
     Additional administrative costs to the State Tax Department from the passage of this bill would be $25,600 during the current fiscal year due to programming changes for the new exemption.
    

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 25,600 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 25,600 0 0
2. Estimated Total Revenues 0 -6,000,000 -6,000,000
3. Explanation of above estimates (including long-range effect):
     As written, the passage of this bill would result in a loss to the State Road Fund of up to $6.0 million per year. This bill provides a refundable exemption from the variable rate component of the Motor Fuel Excise Tax on sales of special fuel and propane for use in private dwellings. However, the bill is very broad in scope since it does not define “private dwelling”. For instance, it is unclear whether fuel used to heat a commercial apartment dwelling would be allowed a refund of the gasoline sales tax.
    
     It should also be noted that other home heating sources (e.g., natural gas, electricity) are also subject to state and local consumption taxes. Therefore, exempting special fuel and propane for home heating from Motor Fuel Sales Tax would create an tax preference for the use of these fuels in home heating rather than the use of electricity or natural gas.
    
     Additional administrative costs to the State Tax Department from the passage of this bill would be $25,600 during the current fiscal year due to programming changes for the new exemption.
    
    


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov
     The stated purpose of this bill is to exempt special fuels and propane gas that are used for home heating purposes from the motor fuel excise tax.
    
     This bill amends current W.Va. Code §11-14C-9 to include “all gallons of special fuel and propane used for heating private dwellings” to the refundable exemptions from the variable rate component of the Motor Fuel Excise Tax. However, there is no definition of “private dwellings”.