Date Requested:March 22, 2013
Time Requested:12:08 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R2954 Introduced HB3058
CBD Subject: AD VALOREM PROPERTY TAXES
FUND(S)
General Revenue Fund, Local Government Funds
Sources of Revenue
General Fund,Other Fund Local Property Tax revenu
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 require antique motor vehicles to be assigned an appraised value of $5,000 for purposes of ad valorem property taxes. The bill also requires the assessed value for all motor vehicles to be at least $420. The bill would also impose on a sale of an antique motor vehicle, a reconciliation excise tax to recapture revenue from the sale.
    
     As written, the bill’s primary changes are (1) setting the assessed value of motor vehicles to be the greater of 60 percent of the lowest value or 60 percent of $700 (currently the assessed value of vehicles is 60 percent of the lowest value), (2) assigning an appraised value of $5,000, for purposes of ad valorem property taxes, to any vehicle that is registered as an antique vehicle and is not used for general transportation, and (3) levying a reconciliation excise tax upon the sale of any antique vehicle receiving the assigned appraised value. The bill also provides information on how the reconciliation excise tax is to be calculated, requires the tax be paid to the local levying bodies, authorizes the county commission to establish administrative procedures for the assessment, collection and refund of the tax, authorizes the sheriff to initiate civil suits for collection of the tax, and indicates the county assessor shall issue tax returns and receive tax returns for the tax.
    
     According to our interpretation, increasing the minimum assessed value of any vehicle to $420 (60 percent of $700) would result in additional revenue, primarily for local governments, of roughly $500,000 per year. The State Tax Department does not have sufficient information to determine which vehicles are registered as an antique vehicle, however, if all vehicles more than 25 years old and currently appraised at more than $5,000 were reappraised with a value of $5,000, the reduction in revenue would be roughly $280,000 per year. The revenue reduction would be borne primary by local governments. Statewide, the aggregate net revenue impact would be an increase of roughly $220,000, with some counties experiencing a net increase in revenue and some counties experiencing a net reduction in revenue. The State Tax Department does not have sufficient information regarding the sale of antique vehicles and thus cannot accurately determine the potential revenue that would result from the levying of the reconciliation excise tax, as proposed by this bill.
    
     The State Tax Department would incur additional administrative costs of $20,000 for programming changes attributable to passage of this bill. Additionally, county assessors would incur additional administrative costs attributable to passage of this bill to compile and maintain information on qualifying antique vehicles. Also, county commissions, sheriffs, and county assessors would incur additional administrative costs for administering the reconciliation excise tax, as proposed by 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 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, the bill’s primary changes are (1) setting the assessed value of motor vehicles to be the greater of 60 percent of the lowest value or 60 percent of $700 (currently the assessed value of vehicles is 60 percent of the lowest value), (2) assigning an appraised value of $5,000, for purposes of ad valorem property taxes, to any vehicle that is registered as an antique vehicle and is not used for general transportation, and (3) levying a reconciliation excise tax upon the sale of any antique vehicle receiving the assigned appraised value. The bill also provides information on how the reconciliation excise tax is to be calculated, requires the tax be paid to the local levying bodies, authorizes the county commission to establish administrative procedures for the assessment, collection and refund of the tax, authorizes the sheriff to initiate civil suits for collection of the tax, and indicates the county assessor shall issue tax returns and receive tax returns for the tax.
    
     According to our interpretation, increasing the minimum assessed value of any vehicle to $420 (60 percent of $700) would result in additional revenue, primarily for local governments, of roughly $500,000 per year. The State Tax Department does not have sufficient information to determine which vehicles are registered as an antique vehicle, however, if all vehicles more than 25 years old and currently appraised at more than $5,000 were reappraised with a value of $5,000, the reduction in revenue would be roughly $280,000 per year. The revenue reduction would be borne primary by local governments. Statewide, the aggregate net revenue impact would be an increase of roughly $220,000, with some counties experiencing a net increase in revenue and some counties experiencing a net reduction in revenue. The State Tax Department does not have sufficient information regarding the sale of antique vehicles and thus cannot accurately determine the potential revenue that would result from the levying of the reconciliation excise tax, as proposed by this bill.
    
     The State Tax Department would incur additional administrative costs of $20,000 for programming changes attributable to passage of this bill. Additionally, county assessors would incur additional administrative costs attributable to passage of this bill to compile and maintain information on qualifying antique vehicles. Also, county commissions, sheriffs, and county assessors would incur additional administrative costs for administering the reconciliation excise tax, as proposed by 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 require antique motor vehicles to be assigned an appraised value. The bill also requires the assessed value for all motor vehicles to be at least $420.
    
     Title X, Section 1 of the W. Va. Constitution requires (1) taxation to be equal and uniform throughout the State, (2) property is taxed in proportion to its value, and (3) no one species of property which is taxed may be taxed higher than any other species of property of equal value.
    
     The proposed bill amends W. Va. Code §11-3c-5 requiring the assessed value of motor vehicles to be the greater of 60 percent of the lowest value or 60 percent of $700 . This provision potentially violates constitutional provisions (1) and (2) as set forth above.
    
     The proposed bill also assigns the value of $5,000 for all antique vehicles as defined in W. Va. Code §17A-10-3a, that is, vehicles more than 25 years old and owned solely as a collector’s item. This provision potentially violates all three of constitutional provisions set forth above.
    
     The proposed bill provides for an reconciliation excise tax calculated as follows:
     (1) sixty percent of the gross proceeds multiplied by:
     (A) The combined regular property tax levy rate for the property tax year when the antique motor vehicle was sold;
     (B) Combined with all applicable special property tax levy rates for the property tax year when the antique motor vehicle was sold, minus:
     (2) The amount of the property tax paid on the motor vehicle for the property tax year in which the antique motor vehicle was sold.
    The above statement could be subject to different interpretations regarding the order of the mathematical operations to be used to calculate the tax