FISCAL NOTE
Date Requested: February 12, 2016 Time Requested: 11:32 AM |
Agency: |
Tax Department, State |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2663 |
Introduced |
SB582 |
|
CBD Subject: |
Taxation |
---|
|
FUND(S):
State Road Fund
Sources of Revenue:
Other Fund State Road 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 provide a refundable tax credit for motor fuel sold for use or consumed in railroad diesel locomotives.
According to our interpretation, this bill provides a refundable exemption, not a credit, from the variable rate or the sales tax rate portion of the motor fuel tax, as the fuel is already exempt from the fixed portion of the tax. The current variable rate is at 12.7 cents per gallon. The bill provides for the limit of the refundable exemption in the aggregate to equal $4.3 million. According to available information, this is close to the amount collected for this tax from railroad diesel locomotives. It is anticipated that gas prices, and thus the variable rate of tax, should rise by the effective date of this bill. The exemption should reach its maximum by 2018 and could either rise or fall depending on the average wholesale price of fuel. The variable sales tax level may vary by up to 10 percent per year based on these changes.
Administrative costs to the Tax Department will be $63,000 in FY2017 and $35,000 in each year thereafter.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2016 Increase/Decrease (use"-") |
2017 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
0 |
63,000 |
35,000 |
Personal Services |
0 |
35,000 |
35,000 |
Current Expenses |
0 |
0 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
0 |
28,000 |
0 |
2. Estimated Total Revenues |
0 |
0 |
-4,300,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, this bill provides a refundable exemption, not a credit, from the variable rate or the sales tax rate portion of the motor fuel tax, as the fuel is already exempt from the fixed portion of the tax. The current variable rate is at 12.7 cents per gallon. The bill provides for the limit of the refundable exemption in the aggregate to equal $4.3 million. According to available information, this is close to the amount collected for this tax from railroad diesel locomotives. It is anticipated that gas prices, and thus the variable rate of tax, should rise by the effective date of this bill. The exemption should reach its maximum by 2018 and could either rise or fall depending on the average wholesale price of fuel. The variable sales tax level may vary by up to 10 percent per year based on these changes.
Administrative costs to the Tax Department will be $63,000 in FY2017 and $35,000 in each year thereafter.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov