FISCAL NOTE
Date Requested: February 05, 2024
Time Requested: 03:30 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3490 |
Introduced |
HB5443 |
|
|---|
| CBD Subject: |
Real and Personal Property; Taxation |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
Legislation creates:
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 include in the high-technology property valuation statute the hosting and processing of electronic data as part of a data center operation and high-performance data computing to process data and perform complex computation and solve algorithms at high speeds in connection with digital, blockchain, and/or artificial intelligence technologies.
The bill, as written, expands the definition of servers used in a high-technology business to include electronic data processing services. Electronic data processing services includes the hosting and processing of electronic data as part of a data center operation and high-performance data computing to process data and perform complex computation and solve algorithms at speeds in connection with digital, blockchain, and/or artificial intelligence technologies.
According to our interpretation, passage of this bill would not result in any reduction of existing property tax revenues. Future potential revenue associated with the defined activity would be reduced if property is assessed at 5 percent salvage value instead of the current 60 percent assessment value.
Additional costs to the State and local governments cannot be determined. County assessors would need to determine whether electronic data processing equipment is used directly in electronic data processing services as defined in the bill.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
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 bill, as written, expands the definition of servers used in a high-technology business to include electronic data processing services. Electronic data processing services includes the hosting and processing of electronic data as part of a data center operation and high-performance data computing to process data and perform complex computation and solve algorithms at speeds in connection with digital, blockchain, and/or artificial intelligence technologies.
According to our interpretation, passage of this bill would not result in any reduction of existing property tax revenues. Future potential revenue associated with the defined activity would be reduced if property is assessed at 5 percent salvage value instead of the current 60 percent assessment value.
Additional costs to the State and local governments cannot be determined. County assessors would need to determine whether electronic data processing equipment is used directly in electronic data processing services as defined in the bill.
Memorandum
The stated purpose of this bill is to include in the high-technology property valuation statute the hosting and processing of electronic data as part of a data center operation and high-performance data computing to process data and perform complex computation and solve algorithms at high speeds in connection with digital, blockchain, and/or artificial intelligence technologies.
The bill would extend the special salvage value valuation of computer servers or other tangible personal property used in a high technology business to include servers used in "data processing services." The term is not clearly defined, but includes,
the hosting and processing of electronic data as part of a data center operation and high-performance data computing to process data and perform complex computation and solve algorithms at high speeds in connection with digital, block-chain, and/or artificial intelligence technologies.
The term "data processing services" is very broad.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov