FISCAL NOTE

Date Requested: March 08, 2017
Time Requested: 12:47 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2366 Introduced HB2820
CBD Subject: Alcoholic Liquors and Beers


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 abolish the Alcohol Beverage Control Commissioner; transferring its powers and duties to the State Lottery Commission; creating alcohol beverage distributors licenses; and creating a per case tax on alcohol.
    
    According to our understanding, it appears the intent of the proposed bill is to abolish the Alcohol Beverage Control Commission (ABCA) in its entirety and transfer its duties and powers to the Lottery Commission effective July 1, 2017. The proposed bill would also alter the mark-up placed on alcohol. Current statute applies a 28 percent mark-up per bottle; the proposed bill maintains the same percentage but applies this as a tax to each case of alcohol distributed by distributors to retailers. Based on data limitations, it would be difficult for the Tax Department to provide accurate analysis of the revenue impact of this bill. There may be additional costs to the Lottery Commission for administration of this tax for the ABCA. These costs are not reflected in this analysis. We note the mark-up per bottle is scheduled to increase to 32 percent on May 1, 2017.
    
    Additional costs incurred by the State Tax Department are expected to be $90,000 in FY2018 and $50,000 for each year thereafter.
    



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 90,000 50,000
Personal Services 0 35,000 35,000
Current Expenses 0 15,000 15,000
Repairs and Alterations 0 0 0
Assets 0 1,000 0
Other 0 39,000 0
2. Estimated Total Revenues 0 0 0


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


    According to our understanding, it appears the intent of the proposed bill is to abolish the Alcohol Beverage Control Commission (ABCA) in its entirety and transfer its duties and powers to the Lottery Commission effective July 1, 2017. The proposed bill would also alter the mark-up placed on alcohol. Current statute applies a 28 percent mark-up per bottle; the proposed bill maintains the same percentage but applies this as a tax to each case of alcohol distributed by distributors to retailers. Based on data limitations, it would be difficult for the Tax Department to provide accurate analysis of the revenue impact of this bill. There may be additional costs to the Lottery Commission for administration of this tax for the ABCA. These costs are not reflected in this analysis. We note the mark-up per bottle is scheduled to increase to 32 percent on May 1, 2017.
    
    Additional costs incurred by the State Tax Department are expected to be $90,000 in FY2018 and $50,000 for each year thereafter.
    



Memorandum


    The stated purpose of this bill is to abolish the Alcohol Beverage Control Commissioner; transferring its powers and duties to the State Lottery Commission; creating alcohol beverage distributors licenses; and creating a per case tax on alcohol.
    
    The proposed bill lacks some details that would aid in its administration.
    



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