FISCAL NOTE
Date Requested: January 25, 2024
Time Requested: 04:38 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2594 |
Introduced |
HB5085 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to create tax incentives for businesses that recycle.
This bill would allow for a credit against the Business and Occupation Tax for businesses that engage in recycling. According to our interpretation, the Business and Occupation Tax is only applied to public utility companies. Due to vagueness in the W. Va. Code about what is considered to be “engaged in recycling,” and an overall lack of information on which companies recycle, we cannot reasonably estimate the amount of revenue loss by the passage of this bill.
There would be no additional administrative costs to the State Tax Division.
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 |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
This bill would allow for a credit against the Business and Occupation Tax for businesses that engage in recycling. According to our interpretation, the Business and Occupation Tax is only applied to public utility companies. Due to vagueness in the W. Va. Code about what is considered to be “engaged in recycling,” and an overall lack of information on which companies recycle, we cannot reasonably estimate the amount of revenue loss by the passage of this bill.
There would be no additional administrative costs to the State Tax Division.
Memorandum
The stated purpose of this bill is to create tax incentives for businesses that recycle.
There appears to be a lack of adequate standards expressed in the bill to guide the State Tax Division in the exercise of power conferred upon it. See State ex rel. White v. Todt, 475 S.E.2d 426, 1996. Therefore, the bill would likely be found to be a violation of W. Va. Const. Art. VI, §1 as an unconstitutional grant of legislative power.
The section to be designated §11-13-3h(a) would give a credit to businesses that choose to engage in recycling. The term recycling would have the meaning of the term as it is defined in §22-15-1, et. seq. However, neither the term “recycling” or “engage in recycling” are defined anywhere in Chapter 22, Article 15.
There is no effective date in which the credit created by §11-13-3h would become available to businesses that would be permitted to receive the credit.
The bill fails to mention a method of calculating such a credit. The lack of such guidance would require the Tax Commissioner to make the determination of how much of a credit would “incentivize” such businesses to recycle without any legislative guidance.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov