Date Requested: February 06, 2015
Time Requested: 02:55 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
2797 Introduced HB2638
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 exempt motor vehicles from personal property tax.
    
    Under the provisions of this bill, motor vehicles would not be subject to Property Tax. The estimated revenue loss would be roughly $35.5 million to the State General Revenue Fund, $44.1 million to local county school boards, $31.9 million to county commissions and $8.5 million 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 to the State Tax Department would be $20,000 in FY2016. Additional costs to counties would be minimal.



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 -120,000,000


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


    Under the provisions of this bill, motor vehicles would not be subject to Property Tax. The estimated revenue loss would be roughly $35.5 million to the State General Revenue Fund, $44.1 million to local county school boards, $31.9 million to county commissions and $8.5 million 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 to the State Tax Department would be $20,000 in FY2016. Additional costs to local governments would be minimal and would only be incurred by those few counties that prepare their own personal tax returns.
    
    



Memorandum


    The stated purpose of this bill is to exempt motor vehicles from personal property tax.
    
    A primary concern is whether the Legislature has the authority under West Virginia Constitution Article X, Section 1, to exempt this type of property from ad valorem taxation. Other than specified exemptions provided for in the Constitution or in adopted amendments to the Constitution (e.g., Class I intangibles, freeport inventories, farm personal property), only property used for certain activities (i.e., educational, literary, scientific, religious or charitable purposes) may be exempted.
    



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