FUND(S):

General

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.


    This bill would increase the minimum mark-up on retail liquor sales from retail liquor outlets to private clubs and to the general public from 110% to 120% of cost.
    
    The general public already pays typically 130% or more above cost. Thus, with passage of the bill no added tax revenue would be generated from sales to the general public.
    
    Private clubs typically negotiate and pay only the 110% or the minimum markup amount. With the passage of the bill, there is a potential increase in revenue for the state. The amount of the increase is speculative.
    
    Private clubs would pay an extra 10% on their liquor purchases. Therefore, the state could get additional sales tax revenue based on 6% of the extra 10% amount of liquor sales to private clubs. There is no way to quantify the amount of the extra 10% percent for private club sales and the resulting 6% of that amount generated for the state and also the potential revenue from the 5% municipal tax.
    



Fiscal Note Detail


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 0


Explanation of above estimates (including long-range effect):


    This bill would increase the minimum mark-up on retail liquor sales from retail liquor outlets to private clubs and to the general public from 110% to 120% of cost.
    
    The general public already pays typically 130% or more above cost. Thus, with passage of the bill no added tax revenue would be generated from sales to the general public.
    
    Private clubs typically negotiate and pay only the 110% or the minimum markup amount. With the passage of the bill, there is a potential increase in revenue for the state. The amount of the increase is speculative.
    
    Private clubs would pay an extra 10% on their liquor purchases. Therefore, the state could get additional sales tax revenue based on 6% of the extra 10% amount of liquor sales to private clubs. There is no way to quantify the amount of the extra 10% percent for private club sales and the resulting 6% of that amount generated for the state and also the potential revenue from the 5% municipal tax.



Memorandum


    This bill would increase the minimum mark-up on retail liquor sales from retail liquor outlets to private clubs and to the general public from 110% to 120% of cost.
    
    The general public already pays typically 130% or more above cost. Thus, with passage of the bill no added tax revenue would be generated from sales to the general public.
    
    Private clubs typically negotiate and pay only the 110% or the minimum markup amount. With the passage of the bill, there is a potential increase in revenue for the state. The amount of the increase is speculative.
    
    Private clubs would pay an extra 10% on their liquor purchases. Therefore, the state could get additional sales tax revenue based on 6% of the extra 10% amount of liquor sales to private clubs. There is no way to quantify the amount of the extra 10% percent for private club sales and the resulting 6% of that amount generated for the state and also the potential revenue from the 5% municipal tax.



    Person submitting Fiscal Note: Anoop Bhasin on behalf of the WVABCA
    Email Address: Anoop.K.Bhasin@wv.gov