Date Requested:January 21, 2014
Time Requested:12:43 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2014R1091 Introduced SB389
CBD Subject: FIREWORKS EXPANSION FOR VETERANS FUNDING
FUND(S)
General Revenue Fund & West Virginia Veterans Program Fund
Sources of Revenue
General Fund,Other Fund West Virginia Veterans P
Legislation creates:
A New Program,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 legalize and regulate the selling of fireworks; to create the West Virginia Veterans Program Fund; to impose a special ten percent fee on the sale of fireworks; and to use those proceeds for the Veterans Program Fund.
    
     According to our interpretation, passage of this bill would require the State Tax Commissioner to establish a Fireworks Registration Fee in the amount of $20 to be charged to any retailers desiring to sell fireworks. The Fireworks Registration Fee would be in addition to the current Business Registration Fee. The proposed bill also adds a 10 percent Fireworks Safety Fee in addition to the State Consumer Sales and Service Tax to be added to retail sales of consumer fireworks and items described in proposed bill. The proceeds from the 10 percent Fireworks Safety Fee in the West Virginia Veterans Program Fund.
    
     Passage of this bill would result in a net gain of roughly $800,000 to the General Revenue Fund and a gain of $1.3 million to the West Virginia Veterans Program Fund.
    
     Additional administrative costs to the State Tax Department from the passage of this bill would be $45,000. The State Treasurer’s Office may also incur some costs related to the administration and collection of the new fireworks safety fee.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 45,000
Personal Services 0 0 0
Current Expenses 0 0 45,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 800,000
3. Explanation of above estimates (including long-range effect):
     Passage of this bill would legalize and regulate the selling of fireworks, create the West Virginia Veterans Program Fund, to impose a special ten percent fee on the sale of fireworks, and to use those proceeds for the Veterans Program Fund.
    
     According to our interpretation, passage of this bill would require the State Tax Commissioner to establish a Fireworks Registration Fee in the amount of $20 to be charged to any retailers desiring to sell fireworks. The Fireworks Registration Fee would be in addition to the current Business Registration Fee. The proposed bill also adds a 10 percent Fireworks Safety Fee in addition to the State Consumer Sales and Service Tax to be added to retail sales of consumer fireworks and items described in proposed bill. The proceeds from the 10 percent Fireworks Safety Fee in the West Virginia Veterans Program Fund.
    
     Passage of this bill would result in a net gain of roughly $800,000 to the General Revenue Fund and a gain of $1.3 million to the West Virginia Veterans Program Fund.
    
     Additional administrative costs to the State Tax Department from the passage of this bill would be $45,000. The State Treasurer’s Office may also incur some costs related to the administration and collection of the new fireworks safety fee.
    


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov
     The stated purpose of this bill is to legalize and regulate the selling of fireworks; to create the West Virginia Veterans Program Fund; to impose a special ten percent fee on the sale of fireworks; and to use those proceeds for the Veterans Program Fund.
    
     While the bill purports to create a ten percent fee on sales of fireworks, it does not provide for the collection of the fee by the vendor or remittance of the fee to the State Tax Department, nor does it authorize the promulgation of a legislative rule by the State Tax Commissioner for the administration of the new fee. No provision is made for the assessment or collection of delinquent fees.
    
     Although the bill creates a special account in the State treasury for the deposit of the fees, it does not provide for the disposition of the funds accumulated in the new account. Although the stated purpose indicates the purpose is "to use those proceeds for the Veterans Program Fund," it does not state that the purpose is to use the funds for veterans programs.