Date Requested:February 09, 2005
Time Requested:03:07 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005r477 intro sb138
CBD Subject: farming equioment & livestock exempt
FUND(S)
General Revenue Fund, local governments
Sources of Revenue
General Fund,Other Fund Local property tax
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 farming equipment and livestock from the personal property tax.
    
    According to our interpretation and assuming that the proposed exemption is limited to Class I property, this exemption would result in a revenue loss of $860,000 annually to local levying bodies and a minimal decline in General Revenue Fund collections.
    
    The Tax Department will incur a one-time programming cost of $20,000. There would be no other additional administrative costs to the Tax Department or local governments.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 20,000 0
Personal Services 0 0 0
Current Expenses 0 20,000 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -860,000 -860,000
3. Explanation of above estimates (including long-range effect):
    All but $4,500 of the revenue decrease is a decrease in revenue to all local property tax levying bodies statewide. The remaining $4,500 is a decrease in state General Revenue Fund collections.
    
    The cost reflected on the chart above is a one-time programming cost to the Tax Department for computer programming changes on the statewide property tax computer network. There would be no other additional administrative costs to the Tax Department or local governments.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to exempt farming equipment and livestock from the personal property tax. The bill specifically exempts all implements, equipment, machinery, vehicles, supplies, crops and livestock used to engage in commercial farming. However, commercial farming is not defined in the bill. It is possible for commercial personal property business inventory in the form of implements, equipment, machinery, vehicles, supplies, crops and livestock that are used to engage in commercial farming to be exempt. In addition, the bill does not state that the equipment must be used exclusively in agriculture. Therefore, it is possible for personal property that is at times used in agriculture to be exempt.