Date Requested: January 21, 2015
Time Requested: 10:55 AM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
1022 Introduced HB2111
CBD Subject: Tax


FUND(S):

General Revenue Fund, local governments

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 this bill is to establish the Wireless Technology Business Property Valuation Act which provides for mandated salvage valuation for property tax purposes of tangible personal property directly used in certain wireless technology businesses.
    
    Under the provisions of this bill, property directly used in certain wireless technology business would be valued at salvage value. The bill would result in an estimated revenue loss of $300,000. The estimated revenue loss would be roughly $90,000 to the State General Revenue Fund, $110,000 to local county school boards, $80,000 to county commissions and $20,000 to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the FY 2015 Classified Assessed Valuations Taxes Levied publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula.
    
    Additional administrative costs for the State Tax Department would be $20,000. There would be no additional administrative costs for local governments.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
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 -300,000


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


    Under the provisions of this bill, property directly used in certain wireless technology business would be valued at salvage value. The bill would result in an estimated revenue loss of $300,000. The estimated revenue loss would be roughly $90,000 to the State General Revenue Fund, $110,000 to local county school boards, $80,000 to county commissions and $20,000 to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the FY 2015 Classified Assessed Valuations Taxes Levied publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula.
    
    Additional administrative costs for the State Tax Department would be $20,000. There would be no additional administrative costs for local governments.
    



Memorandum


    The stated purpose of this bill is to establish the Wireless Technology Business Property Valuation Act which provides for mandated salvage valuation for property tax purposes of tangible personal property directly used in certain wireless technology businesses.
    
    The bill incorrectly assumes that cell towers are locally assessed but in practice towers owned by cellular service providers are assessed by the Board of Public Works. The bill also incorrectly defines an antenna as a tower when, in fact, a cellular tower normally hosts several antennae.
    
    



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