FISCAL NOTE

Date Requested: March 14, 2017
Time Requested: 01:32 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
3185 Introduced HB3063
CBD Subject: Taxation


FUND(S):

General Revenue Fund

Sources of Revenue:

General 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 increase the tax on providers of inpatient and outpatient hospital services for two years. According to our interpretation, the proposed bill would raise the Health Care Provider Tax on inpatient and outpatient hospitals by 0.25 percent to 2.75 percent effective July 1, 2017. Funds collected as a result of this increase are dedicated to the General Revenue Fund. The increases will expire and the current rates will be reinstated after two years. The estimated net annual increase could be $12.7 million in FY2018 and $13.9 million in FY2019. Additional costs incurred by the State Tax Department would be $30,000 in FY2018 and $10,000 in FY2019.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 30,000 10,000
Personal Services 0 10,000 10,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 20,000 0
2. Estimated Total Revenues 0 12,700,000 13,900,000


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


According to our interpretation, the proposed bill would raise the Health Care Provider Tax on inpatient and outpatient hospitals by 0.25 percent to 2.75 percent effective July 1, 2017. Funds collected as a result of this increase are dedicated to the General Revenue Fund. The increases will expire and the current rates will be reinstated after two years. The estimated net annual increase could be $12.7 million in FY2018 and $13.9 million in FY2019. Additional costs incurred by the State Tax Department would be $30,000 in FY2018 and $10,000 in FY2019.



Memorandum


The stated purpose of this bill is to increase the tax on providers of inpatient and outpatient hospital services for two years. The proposed bill deletes the previous rate and inserts the new rate, when the new rate is temporary and will expire after two years. The last sentence of subsection (e) states, “The money collected after the increase in rate shall be deposited in the General Revenue Fund.” As written, this could be interpreted to mean that the diversion of taxes collected to the General Revenue Fund will continue even after the new rate expires. Subsection (d) uses the date “July 1, 1970.” This is an apparent typo and should be corrected to reflect the year 2017.



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