FISCAL NOTE
FUND(S):
General Revenue Fund
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.
The stated purpose of this bill is to gradually eliminate the consumers sales tax on food and food products sold for human consumption off the premises where sold.
As stated, the passage of this bill would eliminate the Consumers Sales Tax on food sold for human consumption off the premises where sold by a three-year phase-out. According to our interpretation, this bill would apply to food items sold at grocery stores. The following table provides estimates of revenue loss to the General Revenue Fund. Fiscal Year 2009 represents the first full year of removal of the Consumers Sales Tax on food sold at grocery stores.
Sales of Food
Meant for Home
Consumption Only
FY2006 -$46.4 million
FY2007 -$97.1 million
FY2008 -$147.8 million
FY2009 -$152.0 million
Additional administrative costs to the Tax Department would be about $24,000 per year until the tax is eliminated due to notifying taxpayers of the rate changes. Thereafter, there would be no additional administrative costs.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2005 Increase/Decrease (use"-") |
2006 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
23,925 |
23,925 |
0 |
Personal Services |
0 |
0 |
0 |
Current Expenses |
23,925 |
23,925 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
0 |
0 |
0 |
2. Estimated Total Revenues |
0 |
-46,400,000 |
-152,000,000 |
Explanation of above estimates (including long-range effect):
As stated, the passage of this bill would eliminate the Consumers Sales Tax on food sold for human consumption off the premises where sold by a three-year phase-out. According to our interpretation, this bill would apply to food items sold at grocery stores. The following table provides estimates of revenue loss to the General Revenue Fund. Fiscal Year 2009 represents the first full year of removal of the Consumers Sales Tax on food sold at grocery stores.
Sales of Food
Meant for Home
Consumption Only
FY2006 -$46.4 million
FY2007 -$97.1 million
FY2008 -$147.8 million
FY2009 -$152.0 million
Additional administrative costs to the Tax Department would be about $24,000 per year until the tax is eliminated due to notifying taxpayers of the rate changes. Thereafter, there would be no additional administrative costs.
Memorandum
The stated purpose of this bill is to gradually eliminate the consumers sales tax on food and food products sold for human consumption off the premises where sold.
The bill does not specifically define food or “food products,” nor does it provide guidance for the requirement that the food be sold for consumption off the premises where sold.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us