FISCAL NOTE



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 allow owners of warehouses which are federally designated customs bonded warehouses and warehouses which are otherwise approved by the Alcohol Beverage Control Commissioner to store in such warehouses and to transport into, out of and within the state quantities of alcoholic liquors, wine, beer or nonintoxicating beer which are not intended or being stored for the purpose of sale or use within the state.
    
    This bill deals with warehouses for storage but not resale or use of alcoholic liquors, wine, beer or nonintoxicating beer within West Virginia. Based on the stated purpose, property stored in such warehouses would be exempt from property taxation under the Freeport Amendment. However, this bill allows transportation of the alcoholic liquors, wine, beer or nonintoxicating beer stored in such warehouses to “a lawful purchaser”, but the bill does not require that the “lawful purchaser” must be out-of-state. Therefore, property stored in such warehouses may not necessarily be exempt under the Freeport Amendment.
    
    Additional administrative costs to the State Tax Department or local governments would be minimal.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
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 0


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


    This bill deals with warehouses for storage but not resale or use of alcoholic liquors, wine, beer or nonintoxicating beer within West Virginia. Based on the stated purpose, property stored in such warehouses would be exempt from property taxation under the Freeport Amendment. However, this bill allows transportation of the alcoholic liquors, wine, beer or nonintoxicating beer stored in such warehouses to “a lawful purchaser”, but the bill does not require that the “lawful purchaser” must be out-of-state. Therefore, property stored in such warehouses may not necessarily be exempt under the Freeport Amendment.
    
    Additional administrative costs to the State Tax Department or local governments would be minimal.



Memorandum


    The stated purpose of this bill is to allow owners of warehouses which are federally designated customs bonded warehouses and warehouses which are otherwise approved by the Alcohol Beverage Control Commissioner to store in such warehouses and to transport into, out of and within the state quantities of alcoholic liquors, wine, beer or nonintoxicating beer which are not intended or being stored for the purpose of sale or use within the state.
    
    Article X, Section 1c of the West Virginia Constitution (i.e., the Freeport Amendment) exempts “tangible personal property which is moving in interstate commerce through or over the territory of the State of West Virginia, or which was consigned from a point of origin outside the State to a warehouse, public or private, within the State for storage in transit to a final destination outside the State . . .” from ad valorem taxation. This bill, in section 6, allows transportation of the alcoholic liquors, wine, beer or nonintoxicating beer stored in in-State “federally designated customs bonded warehouses” or an in-state Alcohol Beverage Control approved warehouse to “a lawful purchaser”. The absence of language in the bill requiring that the “lawful purchaser” must be out-of-state as the final destination of the alcoholic beverage causes the bill to violate Article X, Section 1c of the West Virginia Constitution.
    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kpetry@tax.state.wv.us