FISCAL NOTE
Date Requested: February 08, 2016
Time Requested: 02:17 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2580 |
Introduced |
SB555 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
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 provide whenever the average wholesale price of motor fuel is less than $2 per gallon, the tax on that fuel is increased by an addition $.05.
The bill is unclear as to whether the floor of the average wholesale price, set in code as $2.34, is being changed, whether the bill is referencing the actual calculated average wholesale price, or whether the bill is imposing an additional $.05 on the excise tax when the average wholesale price of motor fuel is less than $2 per gallon. Currently, statute sets a limit of $2.34 as the lowest price level that the variable or sales tax rate on motor fuel can be calculated. Furthermore, the annual change in the average wholesale price used to calculate the sales tax rate is limited to 10 percent. The average wholesale price is calculated annually based on a four-month period.
There would be no additional costs to the Tax Department.
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 |
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):
The stated purpose of this bill is to provide whenever the average wholesale price of motor fuel is less than $2 per gallon, the tax on that fuel is increased by an addition $.05.
The bill is unclear as to whether the floor of the average wholesale price, set in code as $2.34, is being changed, whether the bill is referencing the actual calculated average wholesale price, or whether the bill is imposing an additional $.05 on the excise tax when the average wholesale price of motor fuel is less than $2 per gallon. Currently, statute sets a limit of $2.34 as the lowest price level that the variable or sales tax rate on motor fuel can be calculated. Furthermore, the annual change in the average wholesale price used to calculate the sales tax rate is limited to 10 percent. The average wholesale price is calculated annually based on a four-month period.
There would be no additional costs to the Tax Department.
Memorandum
The stated purpose of this bill is to provide whenever the average wholesale price of motor fuel is less than $2 per gallon, the tax on that fuel is increased by an addition $.05.
The code provides a floor for the average wholesale price of $2.34 per gallon of motor fuel. If the drafters wanted to add $.05 to the variable rate of motor fuel when prices are low, this bill fails to do so.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov