FISCAL NOTE
FUND(S):
General Revenue Fund, The Partnership to Promote Community Well-Being Account, and the Partnership Trust Fund
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
A New Program,A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to increase the beer tax two cents on a 12 ounce can of beer and direct the money to substance abuse programs and to a trust fund to fund such programs.
As written, this bill proposes to raise the Beer Barrel Tax from the current rate of $5.50 per barrel to $11 per barrel. This increase may yield roughly $7 million in FY2010 and $7.6 million per year, thereafter. These estimates include consumption declines in response to price increases associated with changes in tax rates.
This bill provides that one-half of the moneys generated from the increase be deposited in a special revenue account entitled “The Partnership To Promote Community Well-Being Account” and the other half of the moneys generated from the increase be placed in a special account in the State Treasury designated as “The Partnership Trust Fund”. These new funds would accrue roughly $3.5 million each in FY2010 and $3.8 million each per year thereafter. General Revenue Fund collections may also decrease slightly due to a decrease in beer consumption.
Additional administrative costs to the State Tax Department would be minimal during the current fiscal year due to notifying taxpayers of the rate change and printing of new returns. Thereafter, there may be additional costs associated with the transfer of revenue from the General Revenue Fund to the two new special funds created in this bill.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2009
Increase/Decrease
(use"-") |
2010
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
800 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
800 |
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):
As written, this bill proposes to raise the Beer Barrel Tax from the current rate of $5.50 per barrel to $11 per barrel. This increase may yield roughly $7 million in FY2010 and $7.6 million per year, thereafter. These estimates include consumption declines in response to price increases associated with changes in tax rates.
This bill provides that one-half of the moneys generated from the increase be deposited in a special revenue account entitled “The Partnership To Promote Community Well-Being Account” and the other half of the moneys generated from the increase be placed in a special account in the State Treasury designated as “The Partnership Trust Fund”. These new funds would accrue roughly $3.5 million each in FY2010 and $3.8 million each per year thereafter. General Revenue Fund collections may also decrease slightly due to a decrease in beer consumption.
Additional administrative costs to the State Tax Department would be minimal during the current fiscal year due to notifying taxpayers of the rate change and printing of new returns. Thereafter, there may be additional costs associated with the transfer of revenue from the General Revenue Fund to the two new special funds created in this bill.
Memorandum
The stated purpose of this bill is to increase the beer tax two cents on a 12 ounce can of beer and direct the money to substance abuse programs and to a trust fund to fund such programs.
The reference to establishing “the Partnership to Promote Community Well-Being Account” refers to an article and section which does not exist (i.e., W.Va Code §15-14-4). As of this date, SB497 or HB2308, which create the before mentioned new section, is not law. This bill depends on the new section W.Va Code §15-14-4.
Also, the bill does not provide for specific methodology for allocating Beer Barrel Tax revenue between the General Revenue Fund and “the Partnership to Promote Community Well-Being Account” and the “Partnership Trust Fund”. Although the bill states that “one half of the moneys generated from the increase” shall be deposited into each of the new special funds, it does not provide a method for determining such amounts.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us