FISCAL NOTE
Date Requested: January 11, 2024
Time Requested: 08:38 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1733 |
Introduced |
HB4294 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
State Road Fund
Sources of Revenue:
Other Fund State Road Fund
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 reduce the fuel tax.
According to our interpretation, the proposed bill would remove the imposition of the variable rate tax on motor fuels and reduce the flat rate tax to 20.0 cents per gallon. Under current code, the motor fuel excise tax is composed of a flat rate tax of 20.5 cents per invoiced gallon and a variable rate tax which is 5 percent of the average wholesale price of each motor fuel as determined annually by the State Tax Commissioner. The effective date of the legislation is June 1, 2024.
Per our interpretation, the legislation, if passed, would reduce State Road Fund collections by roughly $215.7 million in FY2025 and in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $15,000 in FY2024.
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 |
15,000 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
15,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
215,700,000 |
215,700,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the proposed bill would remove the imposition of the variable rate tax on motor fuels and reduce the flat rate tax to 20.0 cents per gallon. Under current code, the motor fuel excise tax is composed of a flat rate tax of 20.5 cents per invoiced gallon and a variable rate tax which is 5 percent of the average wholesale price of each motor fuel as determined annually by the State Tax Commissioner. The effective date of the legislation is June 1, 2024.
Per our interpretation, the legislation, if passed, would reduce State Road Fund collections by roughly $215.7 million in FY2025 and in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $15,000 in FY2024.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r. petry@wv.gov