FISCAL NOTE
Date Requested: March 09, 2016
Time Requested: 10:00 AM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1234 |
Amendment |
HB4009 |
|
|---|
| CBD Subject: |
Counties |
|---|
|
FUND(S):
State Road Fund, Tax Department Local Sales Tax and Excise Tax Administration Fund
Sources of Revenue:
Special Fund,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 give each county commission authority to submit road and bridge construction projects to the Commissioner of Highways. The bill authorizes county commissions to impose a county transportation sales and service tax and a county use tax, at a rate not to exceed one percent, to finance the construction, in whole or in part, thereby accelerating the time for completion of those projects. The bill states that the taxes would be collected by the Tax Commissioner, at same time and in the same manner as the state consumers sales and service tax and use taxes are collected. The bill permits the net county transportation sales and use taxes would be deposited in the County Road Improvement Account, a new account that would be created in the State Road Fund, to the credit of the county’s subaccount in that account. The bill states that the funds in the subaccounts could be used to fund road and bridge construction projects on a cash basis and the Division of Highways would be authorized to issue special revenue bonds to finance construction secured by the county’s subaccount. The bill provides criminal penalties.
As written, this bill proposes the potential creation of a subaccount within an account within the State Road Fund. The bill seeks to let counties generate revenue specifically towards road and bridge construction projects by imposing a sales tax on sales in the county. Assuming all 55 counties participate in the County Road Improvement Account at the maximum allowable rate of one percent, the Transportation Sales and Use Taxes could potentially generate approximately $215.0 million statewide. The Tax Department will collect a fee that is equal to the lesser of its costs in providing the service or five percent of the net amount of taxes imposed, estimated to be $10.5 million. The fee will be deposited in the existing Local Sales Tax and Excise Tax Administration Fund. The remainder of the funds would be deposited in the account designated in the State Road Fund and allocated to the Counties in their subaccounts. The formula by which the funds are to be allocated is per the individual sales within the County.
The administrative costs to the Tax Department will be covered by the fee allocated by the bill. This fee will result in no additional appropriations request relating to the activity authorized by this bill.
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):
As written, this bill proposes the potential creation of a subaccount within an account within the State Road Fund. The bill seeks to let counties generate revenue specifically towards road and bridge construction projects by imposing a sales tax on sales in the county. Assuming all 55 counties participate in the County Road Improvement Account at the maximum allowable rate of one percent, the Transportation Sales and Use Taxes could potentially generate approximately $215.0 million statewide. The Tax Department will collect a fee that is equal to the lesser of its costs in providing the service or five percent of the net amount of taxes imposed, estimated to be $10.5 million. The fee will be deposited in the existing Local Sales Tax and Excise Tax Administration Fund. The remainder of the funds would be deposited in the account designated in the State Road Fund and allocated to the Counties in their subaccounts. The formula by which the funds are to be allocated is per the individual sales within the County.
The administrative costs to the Tax Department will be covered by the fee allocated by the bill. This fee will result in no additional appropriations request relating to the activity authorized by this bill.
Memorandum
The stated purpose of this bill is to give each county commission authority to submit road and bridge construction projects to the Commissioner of Highways. The bill authorizes county commissions to impose a county transportation sales and service tax and a county use tax, at a rate not to exceed one percent, to finance the construction, in whole or in part, thereby accelerating the time for completion of those projects. The bill states that the taxes would be collected by the Tax Commissioner, at same time and in the same manner as the state consumers sales and service tax and use taxes are collected. The bill permits the net county transportation sales and use taxes would be deposited in the County Road Improvement Account, a new account that would be created in the State Road Fund, to the credit of the county’s subaccount in that account. The bill states that the funds in the subaccounts could be used to fund road and bridge construction projects on a cash basis and the Division of Highways would be authorized to issue special revenue bonds to finance construction secured by the county’s subaccount. The bill provides criminal penalties.
Errors, adjustments or refunds are corrected and adjustments in payments are made over a period of 6 months in increments of 1/6 each month according to §7-27-40(c)(2). The 6 month periods would be rolling periods. The Tax Department interprets this condition to large errors, adjustments or refunds. However, if it covers even small requests, then it will not be covered under the administrative fee allocated to the Tax Department.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov