FISCAL NOTE



FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

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 this bill is to provide tax credits for the producers and buyers of locally grown produce that is sold within the state. As written, this bill would provide a 5 percent tax credit for the purchase or sale of produce grown in the State that is sold to consumers, produce markets, grocery stores, supermarkets, restaurants, and other resellers. Additionally, the credit would also be available to taxpayers who use the produce in preparation of other foodstuffs. Based upon the Census of Agriculture, the total tax credit available to the original seller of produce would be roughly $4 million per year. The State Tax Department is unable to accurately estimate the amount of tax credit that would be available to purchasers of the produce or to those taxpayers that prepare other foodstuffs from the produce. Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal. The Department of Agriculture may incur additional administrative costs due to passage of this bill.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2010
Increase/Decrease
(use"-")
2011
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 provide a 5 percent tax credit for the purchase or sale of produce grown in the State that is sold to consumers, produce markets, grocery stores, supermarkets, restaurants, and other resellers. Additionally, the credit would also be available to taxpayers who use the produce in preparation of other foodstuffs. Based upon the Census of Agriculture, the total tax credit available to the original seller of produce would be roughly $4 million per year. The State Tax Department is unable to accurately estimate the amount of tax credit that would be available to purchasers of the produce or to those taxpayers that prepare other foodstuffs from the produce. Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal. The Department of Agriculture may incur additional administrative costs due to passage of this bill.



Memorandum


The stated purpose of this bill is to provide tax credits for the producers and buyers of locally grown produce that is sold within the state. As written, this bill would provide a tax credit for the purchase or sale of produce grown in the State that is sold to consumers, produce markets, grocery stores, supermarkets, restaurants, and other resellers. Additionally, the credit would also be available to taxpayers who use the produce in preparation of other foodstuffs. The proposed bill provides little guidance on the actual tax credit mechanism. Additionally, the bill appears to violate the dormant Commerce Clause of the United States Constitution in that it discriminates against interstate commerce by discriminating against out-of-state produce growers.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov