Date Requested: February 11, 2015
Time Requested: 12:30 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
2332 Introduced HB2695
CBD Subject: Tax


FUND(S):

State Road Fund

Sources of Revenue:

Other Fund State Road 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 require a refund of gasoline or fuel excise tax when fuel is consumed by a commercial vehicle while that vehicle is not operated upon the highways of this state.
    
    According to our interpretation, passage of this bill would exempt off-road use fuel from the 5% Wholesale Fuel Sales and Use Tax in any vehicle operated to provide a service or carry goods for charge or other consideration, or directly or indirectly in connection with any business, or other undertaking intended for profit. Exempt fuel use would include fuel used in aircraft, railroads, barges, and possibly other types of machinery that might be categorized as a "vehicle". Passage of this bill would result in a reduction in the State Road Fund of at least $7.0 million per year and a reduction in the State Aeronautics Commission Special Revenue Fund of roughly $1.0 million per year under the assumption that the definition of commercial vehicle would be restricted to aircraft, railroads and barges. A broader definition of the term "vehicle" would result in a greater revenue loss to the State Road Fund. Total off-road motor fuel sales tax collections from all sources are roughly $50 million per year.
    
    Administrative costs to the Tax Department will be $30,000 in FY2016.



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 30,000 0
Personal Services 0 30,000 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):


    According to our interpretation, passage of this bill would exempt off-road use fuel from the 5% Wholesale Fuel Sales and Use Tax in any vehicle operated to provide a service or carry goods for charge or other consideration, or directly or indirectly in connection with any business, or other undertaking intended for profit. Exempt fuel use would include fuel used in aircraft, railroads, barges, and possibly other types of machinery that might be categorized as a "vehicle". Passage of this bill would result in a reduction in the State Road Fund of at least $7.0 million per year and a reduction in the State Aeronautics Commission Special Revenue Fund of roughly $1.0 million per year under the assumption that the definition of commercial vehicle would be restricted to aircraft, railroads and barges. A broader definition of the term "vehicle" would result in a greater revenue loss to the State Road Fund. Total off-road motor fuel sales tax collections from all sources are roughly $50 million per year.
    
    Administrative costs to the Tax Department will be $30,000 in FY2016.



Memorandum


    The stated purpose of this bill is to require a refund of gasoline or fuel excise tax when fuel is consumed by a commercial vehicle while that vehicle is not operated upon the highways of this state.
    
    Rather than amending current law, the proposed bill attempts to amend an article repealed in W.Va. Code Section 11-14-31 effective January 1, 2004.
    



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