FISCAL NOTE
Date Requested: February 21, 2025
Time Requested: 02:36 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1434 |
Introduced |
HB2778 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to create a tax exemption for funeral, cremation, and burial services.
According to our interpretation, this bill would provide a Sales and Use Tax exemption for funeral, cremation, and burial services. The average cost of a burial in West Virginia is $8,074 while the average cost of cremation in the State is $2,289. Nationally, nearly 75 percent of funeral costs are dedicated to metal caskets (21%), funeral service fees (21%), vaults (14%), cremation caskets (11%), and embalming (7%). The State cremation rate is close to 50 percent. According to the Center for Disease Control and Prevention (CDC), in 2023 there were 24,719 reported deaths in West Virginia. Absent an effective date in the bill, provisions of this bill would become effective on January 1, 2026. Passage of this bill would reduce General Revenue Fund collections by nearly $3.0 million in FY2026 and $7.2 million per year in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $1,100 in FY2026.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
1,100 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
1,100 |
0 |
| 2. Estimated Total Revenues |
0 |
-3,000,000 |
-7,200,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, this bill would provide a Sales and Use Tax exemption for funeral, cremation, and burial services. The average cost of a burial in West Virginia is $8,074 while the average cost of cremation in the State is $2,289. Nationally, nearly 75 percent of funeral costs are dedicated to metal caskets (21%), funeral service fees (21%), vaults (14%), cremation caskets (11%), and embalming (7%). The State cremation rate is close to 50 percent. According to the Center for Disease Control and Prevention (CDC), in 2023 there were 24,719 reported deaths in West Virginia. Absent an effective date in the bill, provisions of this bill would become effective on January 1, 2026. Passage of this bill would reduce General Revenue Fund collections by nearly $3.0 million in FY2026 and $7.2 million per year in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $1,100 in FY2026.
Memorandum
The stated purpose of this bill is to create a tax exemption for funeral, cremation, and burial services.
Section 20-6-3 in the West Virginia Code defines “cremation” and “funeral” but does not define “burial”. This proposed exemption may constitute a change in sales taxation that is subject to the notice provisions of the Streamlined Sales and Use Tax Agreement. This bill does not provide an internal effective date.
.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov