FISCAL NOTE
Date Requested: January 14, 2023
Time Requested: 02:55 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1338 |
Introduced |
HB2061 |
|
|---|
| CBD Subject: |
|
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FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
Legislation creates:
Decreases Existing 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 provide a salvage tax rate to businesses operating in economically distressed counties.
The revenue impact of this proposal on Property Tax collections cannot be readily determined. We have limited data on the value of property owned by businesses operating in economically distressed counties. There are eighteen counties in West Virginia that are designated as distressed counties by the Appalachian Regional Commission. The loss of revenue in these counties, municipalities, and county school boards due to passage of this bill could result in the inability for some of these jurisdictions to continue to function. Property taxes on personal property except vehicles located in these counties account for more than $62.0 million in revenue to local governments.
Additional administrative costs to the State Tax Department and local governments cannot be determined.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
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 revenue impact of this proposal on Property Tax collections cannot be readily determined. We have limited data on the value of property owned by businesses operating in economically distressed counties. There are eighteen counties in West Virginia that are designated as distressed counties by the Appalachian Regional Commission. The loss of revenue in these counties, municipalities, and county school boards due to passage of this bill could result in the inability for some of these jurisdictions to continue to function. Property taxes on personal property except vehicles located in these counties account for more than $62.0 million in revenue to local governments.
Additional administrative costs to the State Tax Department and local governments cannot be determined.
Memorandum
The stated purpose of this bill is to provide a salvage tax rate to businesses operating in economically distressed counties.
Article X, Section 1 of the W. Va. Constitution requires taxation to be equal and uniform throughout the State, property to be taxed in proportion to its value, and no one species of property be taxed higher than any other species of property of equal value. The bill, if enacted, would create a situation in which property of equal value would be subject to different assessments from one county to the next.
This bill would require the business personal property of any business operating in a county designated as "distressed" by the Appalachian Regional Commission, a federal government agency, to be appraised and assessed at salvage value for an initial period of five years. The term "salvage value" is not defined in the bill. In addition, the language of the bill is overly broad concerning personal property owned by any business located and operating in a distressed county.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov