FISCAL NOTE
Date Requested: January 18, 2024
Time Requested: 04:52 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1456 |
Introduced |
HB4794 |
|
|---|
| 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 $2.2 million in FY2025 and $5.3 million in subsequent fiscal years. Absent an effective date in the bill, provisions of this bill would become effective on January 1, 2025. Municipal sales tax would also have a revenue loss of roughly $160,000 in FY2025 and $380,000 in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department are expected to be $1,000 in FY2024.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
1,000 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
1,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-2,200,000 |
-5,300,000 |
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 $2.2 million in FY2025 and $5.3 million in subsequent fiscal years. Absent an effective date in the bill, provisions of this bill would become effective on January 1, 2025. Municipal sales tax would also have a revenue loss of roughly $160,000 in FY2025 and $380,000 in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department are expected to be $1,000 in FY2024.
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 may put West Virginia out of compliance with the Streamlined Sales and Use Tax Agreement. The proposed bill does not define “feminine hygiene product” and “diapers” the same as those terms are defined in Appendix C, Part II of, and required by, 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