FISCAL NOTE

Date Requested: February 12, 2021
Time Requested: 02:25 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2281 Introduced SB270
CBD Subject: Taxation


FUND(S):

Local funds

Sources of Revenue:

Other Fund Hotel Occupancy Tax

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 provide for the collection of the hotel occupancy tax by marketplace facilitators. Under the provisions of this bill, hotel or motel rooms booked through marketplace facilitators are subject to the Hotel Occupancy Tax beginning on January 1, 2022. Marketplace facilitators are to collect and remit the tax to the State Tax Commissioner, who will distribute the tax to local governments. Based on available information, it is estimated that the provisions of this bill could result in up to $1.3 million in additional Hotel Occupancy Tax for local governments in FY2022 and up to $3.0 million in FY2023 and thereafter. Administrative costs would be $66,000 in FY2022 and $36,000 in FY2023 and subsequent fiscal years.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2021
Increase/Decrease
(use"-")
2022
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 66,000 36,000
Personal Services 0 36,000 36,000
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 1,300,000 3,000,000


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


Under the provisions of this bill, hotel or motel rooms booked through marketplace facilitators are subject to the Hotel Occupancy Tax beginning on January 1, 2022. Marketplace facilitators are to collect and remit the tax to the State Tax Commissioner, who will distribute the tax to local governments. Based on available information, it is estimated that the provisions of this bill could result in up to $1.3 million in additional Hotel Occupancy Tax for local governments in FY2022 and up to $3.0 million in FY2023 and thereafter. Administrative costs would be $66,000 in FY2022 and $36,000 in FY2023 and subsequent fiscal years.



Memorandum


The stated purpose of this bill is to provide for the collection of the hotel occupancy tax by marketplace facilitators. There are concerns that the bill would be difficult to administer. There are 55 counties and over 200 municipalities. Each taxing jurisdiction may have its own slightly different version of a hotel occupancy tax. The Tax Department may have difficulty in administering the various versions of the hotel occupancy taxes imposed by these taxing jurisdictions. There may also be constitutional concerns. The West Virginia Constitution states, in part, that “taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law. No one species of property from which a tax may be collected shall be taxed higher than any other species of property of equal value … “ W. Va. Constitution Article X, Section 1. “Municipal taxes must also be uniform: The legislature may, by law, authorize the corporate authorities of cities, towns and villages, for corporate purposes, to assess and collect taxes; but such taxes shall be uniform, with respect to persons and property within the jurisdiction of the authority imposing the same.” W. Va. Constitution. Article X, Section 9.



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