FISCAL NOTE

Date Requested: February 11, 2020
Time Requested: 12:24 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
3002 Introduced HB4889
CBD Subject: Taxation


FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

Creates New Revenue, Increases Existing Expenses



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The stated purpose of this bill is to create a 10-cent tax on each opium and opiate Schedule II drug sold to pharmacies in this state to fund drug treatment programs through the Ryan Brown Addiction Prevention and Recovery Fund.
    
    The proposed bill imposes a 10-cent excise tax on each Schedule II pill purchased by or for any licensed pharmacists. All funds will be deposited into the Ryan Brown Addiction Prevention and Recovery Fund. The estimated revenue increase from this bill would be roughly $10.0 million in FY2021 and all subsequent fiscal years.
    
    Additional administrative costs to the State Tax Department would be $70,000 in FY2021 and $40,000 in subsequent years. Costs would be offset by the administrative fee brought in with this program.
    
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 70,000 40,000
Personal Services 0 40,000 40,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 30,000 0
2. Estimated Total Revenues 0 10,000,000 10,000,000


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


    The proposed bill imposes a 10-cent excise tax on each Schedule II pill purchased by or for any licensed pharmacists. All funds will be deposited into the Ryan Brown Addiction Prevention and Recovery Fund. The estimated revenue increase from this bill would be at $10.0 million in FY2021 and all subsequent years.
    
    Additional administrative costs to the State Tax Department would be $70,000 in FY2021 and $40,000 in subsequent years. Costs would be offset by the administrative fee brought in with this program.
    



Memorandum


    The stated purpose of this bill is to create a 10-cent tax on each opium and opiate Schedule II drug sold to pharmacies in this state to fund drug treatment programs through the Ryan Brown Addiction Prevention and Recovery Fund.
    
    The bill does not provide necessary definitions for the terms used within the bill; therefore, taxpayers could have reason to believe the bill does not apply to them. The bill also states that no pharmaceutical manufacturer, distributor, or pharmacy may not pass on as a cost or otherwise collect the excise tax from the patient. This will be difficult to monitor or enforce.
    
    There could also be issues with this bill violating the Equal Protection Clause of the West Virginia Constitution.
    
    The bill title does not state that the bill provides for rule making authority. It also does not specifically state that the bill dedicates the funds to a special revenue account, although it states that the tax is for funding drug addiction programs. The bill title does not state that licensed pharmacies will have to collect and remit the tax.
    
    



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