FISCAL NOTE

Date Requested: February 08, 2017
Time Requested: 05:27 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1356 Introduced HB2133
CBD Subject: Motor Vehicles


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 establish assessed values for certain motor vehicles. As written, the bill provides that antique motor vehicles are to have assessed values not to exceed $5,000. The State Tax Department does not have sufficient information to determine which vehicles are registered as an antique vehicle; however, if all vehicles more than 25 years old and currently assessed at more than $5,000 were reassessed with a value of $5,000, the reduction in revenue would be roughly $120,000 per year. The revenue reduction would be borne primary by local governments. The tax impact of increasing the minimum appraised value of any vehicle to $700 is estimated to be a gain of $450,000. Statewide, the aggregate net revenue impact would be an increase of roughly $330,000, with some counties experiencing a net increase in revenue and some counties experiencing a net reduction in revenue. The State Tax Department would incur additional administrative costs of $20,000 for programming changes attributable to passage of this bill. Additionally, county assessors would incur additional administrative costs attributable to passage of this bill to compile and maintain information on qualifying antique vehicles.



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 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 0 330,000


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


As written, the bill provides that antique motor vehicles are to have assessed values not to exceed $5,000. The State Tax Department does not have sufficient information to determine which vehicles are registered as an antique vehicle; however, if all vehicles more than 25 years old and currently assessed at more than $5,000 were reassessed with a value of $5,000, the reduction in revenue would be roughly $120,000 per year. The revenue reduction would be borne primary by local governments. The tax impact of increasing the minimum appraised value of any vehicle to $700 is estimated to be a gain of $450,000. Statewide, the aggregate net revenue impact would be an increase of roughly $330,000, with some counties experiencing a net increase in revenue and some counties experiencing a net reduction in revenue. The State Tax Department would incur additional administrative costs of $20,000 for programming changes attributable to passage of this bill. Additionally, county assessors would incur additional administrative costs attributable to passage of this bill to compile and maintain information on qualifying antique vehicles.



Memorandum


The stated purpose of this bill is to establish assessed values for certain motor vehicles. Article X, Section 1 of the W. Va. Constitution requires taxation to be equal and uniform throughout the State, property is taxed in proportion to its value, and no one species of property which is taxed may be taxed higher than any other species of property of equal value. The proposed bill also assigns the value of $5,000 for all antique vehicles as defined in W. Va. Code §17A-10-3a, that is, vehicles more than 25 years old and owned solely as a collector’s item. This provision also potentially violates the constitutional provisions of Article X, Section 1.



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