FISCAL NOTE



FUND(S):

Division of Tourism

Sources of Revenue:

Special 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 create a tax on telecommunications businesses to provide as close as reasonably possible, $10 million in revenue to benefit promotion and maintenance of outdoor activities. As written, the passage of this bill would require the State Tax Department to craft a new annual privilege tax of approximately one quarter of one percent on the gross income of telecommunications companies to provide $10 million per year to the Division of Tourism for the promotion and maintenance of outdoor activities in West Virginia, including, but not limited to, skiing and white water rafting. Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $45,000 in FY2015 and roughly $82,000 per year each year thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 45,000 82,000
Personal Services 0 21,000 82,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 10,000 0
Other 0 14,000 0
2. Estimated Total Revenues 0 0 10,000,000


Explanation of above estimates (including long-range effect):


The bill, as written, would create a tax on telecommunications businesses to provide as close as reasonably possible, $10 million in revenue to benefit promotion and maintenance of outdoor activities. As written, the passage of this bill would require the State Tax Department to craft a new annual privilege tax of approximately one quarter of one percent on the gross income of telecommunications companies to provide $10 million per year to the Division of Tourism for the promotion and maintenance of outdoor activities in West Virginia, including, but not limited to, skiing and white water rafting. Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $45,000 in FY2015 for determination of the applicable tax rate, forms development, training, and computer programming and roughly $82,000 per year each year, thereafter for return and payment processing and for auditing.



Memorandum


The stated purpose of this bill is to create a tax on telecommunications businesses to provide as close as reasonably possible, $10 million in revenue to benefit promotion and maintenance of outdoor activities. As written, the bill provides a number of terms and phrases, including “all telecommunications business beginning and ending within this state,” “gross income apportioned to this state from all telecommunications business that either begins or ends in this state,” without providing a clear definition of the terms and phrases which could lead to different interpretations and increased administrative issues.



    Person submitting Fiscal Note: Mark B. Muchow
    Email Address: Roger.D.Cox@wv.gov