FISCAL NOTE
Date Requested: February 12, 2025
Time Requested: 08:01 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1662 |
Introduced |
HB2122 |
|
|---|
| 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 exempt from sales tax certain infant products and hygiene products.
Passage of this bill would add an exemption from sales tax for certain infant and hygiene products. Based on our interpretation, passage of this bill would result in a loss to the General Revenue Fund collections of roughly $2.1 million in FY2026 and $5.1 million in subsequent fiscal years. Absent an effective date in the bill, provisions of this bill would become effective on January 1, 2026. Municipal sales tax would also have a revenue loss of roughly $0.16 million in FY2025 and $0.4 million in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department are expected to 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 |
-2,100,000 |
-5,100,000 |
Explanation of above estimates (including long-range effect):
Passage of this bill would add an exemption from sales tax for certain infant and hygiene products. Based on our interpretation, passage of this bill would result in a loss to the General Revenue Fund collections of roughly $2.1 million in FY2026 and $5.1 million in subsequent fiscal years. Absent an effective date in the bill, provisions of this bill would become effective on January 1, 2026. Municipal sales tax would also have a revenue loss of roughly $0.16 million in FY2025 and $0.4 million in subsequent fiscal years.
The population of those purchasing feminine hygiene products is estimated to be more than 410,000. The number of infants requiring an infant car seat is estimated at 16,600. Adults wearing diapers are estimated to exceed 200,000 and children wearing diapers are estimated at 50,000.
Additional administrative costs incurred by the State Tax Department are expected to be $1,100 in FY2026.
Memorandum
The stated purpose of this bill is to exempt from sales tax certain infant products and hygiene products.
The definitions in the proposed bill are different from those used in the Streamlined Sales and Use Tax Agreement. Specifically, the bill does not define “feminine hygiene product” and “diapers” the same as those terms are defined in Appendix C, Part II of Article III, Section 327 of the Streamlined Sales and Use Tax Agreement, of which West Virginia is a signatory.
The bill does not contain an internal effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov