Date Requested:February 19, 2013
Time Requested:01:06 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R1891 Introduced HB2529
CBD Subject: MOTOR FUEL EXCISE TAX RATE REDUCED
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 reduce the tax on motor fuel.
    
     According to our interpretation, the passage of this bill would reduce the flat rate component of the Motor Fuel Excise Tax from the current rate of 20.5 cents per gallon to 15 cents per gallon. While the bill drafter possibly also sought to delete the variable rate component of the Motor Fuel Excise Tax (i.e., 5% of the average wholesale price of fuel), it is our interpretation that the variable rate component would remain intact because of other sections of the West Virginia Code related to the imposition of such tax. As of January 1, 2013, the variable rate portion of the Motor Fuel Excise Tax is 14.2 cents per gallon. The reduction in the flat rate component of the tax would result in a loss to the State Road Fund of nearly $60 million per year.
    
     Additional administrative costs to the State Tax Department would be minimal.

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 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 -60,000,000
3. Explanation of above estimates (including long-range effect):
     The stated purpose of this bill is to reduce the tax on motor fuel.
    
     According to our interpretation, the passage of this bill would reduce the flat rate component of the Motor Fuel Excise Tax from the current rate of 20.5 cents per gallon to 15 cents per gallon. While the bill drafter possibly also sought to delete the variable rate component of the Motor Fuel Excise Tax (i.e., 5% of the average wholesale price of fuel), it is our interpretation that the variable rate component would remain intact because of other sections of the West Virginia Code related to the imposition of such tax. As of January 1, 2013, the variable rate portion of the Motor Fuel Excise Tax is 14.2 cents per gallon. The reduction in the flat rate component of the tax would result in a loss to the State Road Fund of nearly $60 million per year.
    
     Additional administrative costs to the State Tax Department would be minimal.


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov
     The stated purpose of this bill is to reduce the tax on motor fuel.
    
     The proposed bill reduces the flat rate component of the tax from $.205 per invoiced gallon to $.15. Although the bill deletes the variable rate component in section 11-14C-5(a) and (b), it does not remove the variable rate component in any other section of the code. As a result, the variable rate component would remain intact.