FISCAL NOTE
FUND(S):
General Revenue Fund, local government funds
Sources of Revenue:
General Fund,Other Fund local property tax
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of the bill is to establish the High-Technology Business Property Valuation Act, provide for mandated salvage valuation for property tax purposes of tangible personal property and computer servers directly used in certain high-technology or internet advertising businesses, and to exempt all purchases of computer software, computers, servers and building materials and tangible personal property installed into a building or facility for direct use in a high-technology business or an internet advertising business from the consumers sales and service tax and the use tax.
As written, this bill would qualify servers directly used in a high technology business or in an Internet advertising business for valuation for Property Tax purposes at 5% of the original cost of the items. The bill would require the assessor of the county in which a potentially qualifying item is located to determine, in writing, whether or not the item is directly used in a high technology business or in an Internet advertising business. The proposed change in valuation would result in a reduction of roughly $200,000 per year in local government revenue. Additionally, the bill extends a Consumers Sales and Service Tax exemption for selected computer hardware and software to the tangible personal property to be installed into a building or facility for direct use in a high technology business or in an Internet advertising business. Due to the potential for broad application of the proposed Consumers Sales and Service Tax exemption, we are unable to accurately estimate the revenue impact related to the sales tax exemption.
Additional administrative costs to the State Tax Department associated with this bill would be roughly $25,000. There would be no additional costs for local governments.
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 |
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):
As written, this bill would qualify servers directly used in a high technology business or in an Internet advertising business for valuation for Property Tax purposes at 5% of the original cost of the items. The bill would require the assessor of the county in which a potentially qualifying item is located to determine, in writing, whether or not the item is directly used in a high technology business or in an Internet advertising business. The proposed change in valuation would result in a reduction of roughly $200,000 per year in local government revenue. Additionally, the bill extends a Consumers Sales and Service Tax exemption for selected computer hardware and software to the tangible personal property to be installed into a building or facility for direct use in a high technology business or in an Internet advertising business. Due to the potential for broad application of the proposed Consumers Sales and Service Tax exemption, we are unable to accurately estimate the revenue impact related to the sales tax exemption.
Additional administrative costs to the State Tax Department associated with this bill would be roughly $25,000. There would be no additional costs for local governments.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us