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 impose an excise tax on grocery stores, drug stores and convenience stores equal to five cents for each plastic shopping bag given to customers. The tax may not be passed on to customers.
As written, this bill creates a new excise tax to be imposed upon grocery stores, drug stores and convenience stores at a rate of five cents for each plastic shopping bag provided to customers. Assuming that nearly all plastic bags purchased by businesses subject to the proposed tax are provided to customers at no cost, passage of this bill could result in additional revenue of about $23 million for the State. This bill does not create a new fund, or designate where the additional revenue is to be deposited. Therefore, it is assumed that these funds would be deposited in the State General Revenue Fund.
Additional administrative costs to the State Tax Department would be about $78,000 in FY2011 and roughly $73,000 per year thereafter for additional personnel to administer this new tax and for new returns to be printed.
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 |
77,864 |
72,864 |
| Personal Services |
0 |
49,284 |
49,284 |
| Current Expenses |
0 |
23,580 |
23,580 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
5,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
23,000,000 |
Explanation of above estimates (including long-range effect):
The stated purpose of this bill is to impose an excise tax on grocery stores, drug stores and convenience stores equal to five cents for each plastic shopping bag given to customers. The tax may not be passed on to customers.
As written, this bill creates a new excise tax to be imposed upon grocery stores, drug stores and convenience stores at a rate of five cents for each plastic shopping bag provided to customers. Assuming that nearly all plastic bags purchased by businesses subject to the proposed tax are provided to customers at no cost, passage of this bill could result in additional revenue of about $23 million for the State. This bill does not create a new fund, or designate where the additional revenue is to be deposited. Therefore, it is assumed that these funds would be deposited in the State General Revenue Fund.
Additional administrative costs to the State Tax Department would be about $78,000 in FY2011 and roughly $73,000 per year thereafter for additional personnel to administer this new tax and for new returns to be printed.
Memorandum
The stated purpose of this bill is to impose an excise tax on grocery stores, drug stores and convenience stores equal to five cents for each plastic shopping bag given to customers. The tax may not be passed on to customers.
This bill creates a new article in Chapter 11 titled the Plastic Shopping Bag Excise Tax. It proposes to place upon all “grocery stores, drug stores and convenience stores” subject to the consumers sales and service tax an excise tax of five cents for each plastic shopping bag provided to customers. However, this tax creates a number of problems.
First, calculating the actual number of shopping bags provided to customers may be very cumbersome. The bill only provides that plastic shopping bags actually provided are subject to the tax. Therefore, any bags not provided would be exempt from this tax. It may be contrary to the statute to impose the tax upon the purchase of the bags by the store because a number of those bags would be exempt.
Second, there is no definition of “grocery stores, drug stores and convenience stores”. These terms would require a definition, as they are somewhat vague. While the bill would allow the Tax Commissioner to promulgate rules, there is no requirement and no guidance on this issue.
Third, the West Virginia Constitution provides for “equal and uniform” taxation, but this statute would place the excise tax on only “grocery stores, drug stores and convenience stores” that provide plastic shopping bags to its customers, exempting all other retailers from this tax.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov