FISCAL NOTE
Date Requested: February 18, 2025
Time Requested: 04:44 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1774 |
Introduced |
HB2562 |
|
|---|
| CBD Subject: |
|
|---|
|
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.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The stated purpose of this bill is to exempt sales of tangible personal property to safely store firearms, including, but not limited to, safes and trigger locks from the consumer sales tax.
According to our interpretation, the proposed bill would create an exemption from consumer sales and use tax for all sales of tangible personal property used to safely store firearms. The exemption would apply to sales made on or after the effective date of the amendment which is July 1, 2025. Due to the broad definition of items potentially subject to sales tax exemption, we are unable to readily quantify the revenue loss. Based on the assumption that the exemption would largely be confined to sales of safes and trigger locks, the annual revenue loss might be up to $1 million per year when fully effective. A smaller portion of any revenue loss would be attributable to local municipal sales taxes.
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 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
According to our interpretation, the proposed bill would create an exemption from consumer sales and use tax for all sales of tangible personal property used to safely store firearms. The exemption would apply to sales made on or after the effective date of the amendment which is July 1, 2025. Due to the broad definition of items potentially subject to sales tax exemption, we are unable to readily quantify the revenue loss. Based on the assumption that the exemption would largely be confined to sales of safes and trigger locks, the annual revenue loss might be up to $1 million per year when fully effective. A smaller portion of any revenue loss would be attributable to local municipal sales taxes.
Additional administrative costs incurred by the State Tax Department are expected to be $1,100 in FY2026.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
The stated purpose of this bill is to exempt sales of tangible personal property to safely store firearms, including, but not limited to, safes and trigger locks from the consumer sales tax.
The bill would exempt "Sales of tangible personal property to safely store firearms, including, but not limited to, safes and trigger locks" from the consumer’s sales tax. The language of the bill is broad, and the terms are not adequately defined. Because of the "not limited" clause, any item of tangible personal property capable of containing a firearm would arguably be exempt.
The bill also does not explain what it means to "safely store" firearms. Additionally, this bill does not define the term “firearms” or provide a cross reference to another statute such as §61-7-2. The lack of a definition leaves room for ambiguity and may create administrative difficulties.
Person submitting Fiscal Note: Mark Muchow
Email Address: radfiscal@wv.gov