FISCAL NOTE
Date Requested: January 13, 2016
Time Requested: 05:47 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1080 |
Introduced |
SB77 |
|
|---|
| CBD Subject: |
Military and Veterans |
|---|
|
FUND(S):
West Virginia Veterans Program Fund; Fire Protection Fund; Fire Marshal Fees Fund; General Revenue Fund
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to legalize and regulate the selling of fireworks and to impose a special fee on the sale of fireworks to be used for a newly-created West Virginia Veterans Program Fund, the Fire Protection Fund, and the Fire Marshal Fees Fund.
According to our interpretation, the bill would raise approximately $3.8 million in total revenue in the first full fiscal year of implementation. The bill is anticipated to raise $2.9 million from the special 20 percent fee on the sale of fireworks. Revenue from this special fee would be allocated as follows: 50 percent ($1.5 million) to the West Virginia Veterans Program Fund, 25 percent ($700,000) to the Fire Protection Fund, and 25 percent ($700,000) to the Fire Marshal Fees Fund. This money is in addition to the revenue gained through the fees from certificates and registration that the Fire Marshal may collect. General Revenue Fund benefits include approximately $900,000 in revenues anticipated from the state-level sales tax. Additional revenue can be expected for business permitting and registration, but this estimate is not included as no fee amount was specified in the proposed legislation. The State Tax Commissioner may retain a 1 percent fee (equal to approximately $29,000 for the first full fiscal year of implementation) from revenues gained from the special 20 percent fee.
Administrative costs to the Tax Department will be $5,600 for the remainder of FY 2016, $101,000 in FY 2017 and $75,000 each year thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
5,600 |
101,000 |
75,000 |
| Personal Services |
0 |
75,000 |
75,000 |
| Current Expenses |
450 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
14,000 |
0 |
| Other |
5,150 |
12,000 |
0 |
| 2. Estimated Total Revenues |
0 |
3,800,000 |
3,800,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the bill would raise approximately $3.8 million in total revenue in the first full fiscal year of implementation. The bill is anticipated to raise $2.9 million from the special 20 percent fee on the sale of fireworks. Revenue from this special fee would be allocated as follows: 50 percent ($1.5 million) to the West Virginia Veterans Program Fund, 25 percent ($700,000) to the Fire Protection Fund, and 25 percent ($700,000) to the Fire Marshal Fees Fund. This money is in addition to the revenue gained through the fees from certificates and registration that the Fire Marshal may collect. General Revenue Fund benefits include approximately $900,000 in revenues anticipated from the state-level sales tax. Additional revenue can be expected for business permitting and registration, but this estimate is not included as no fee amount was specified in the proposed legislation. The State Tax Commissioner may retain a 1 percent fee (equal to approximately $29,000 for the first full fiscal year of implementation) from revenues gained from the special 20 percent fee.
Given that there is no internal effective date for the tax changes proposed by this bill and considering the seasonality of fireworks and similar commodities, partial-year revenues if implemented at a time other than July 1 may vary.
Administrative costs to the Tax Department will be $5,600 for the remainder of FY 2016, $101,000 in FY 2017 and $75,000 each year thereafter.
Memorandum
The stated purpose of this bill is to legalize and regulate the selling of fireworks and to impose a special fee on the sale of fireworks to be used for a newly-created West Virginia Veterans Program Fund, the Fire Protection Fund, and the Fire Marshal Fees Fund.
The cost of the fee for registering, permitting, or certification with the Fire Marshal is not specified. Further, it is unclear how these collected fees will be used.
It is unclear what is to be remitted to the State Tax Commissioner by the retailers within 20 days after the end of each preceding month.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov