FISCAL NOTE

Date Requested: February 24, 2021
Time Requested: 01:51 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2000 Introduced HB2736
CBD Subject: Taxation


FUND(S):

General Revenue Fund

Sources of Revenue:

General 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 exempt consumer sales tax on sales of firearms and firearm ammunition sold in this state to residents of this state. According to our interpretation, the proposed bill would create an exemption from Consumer Sales Tax for sales of firearms and ammunition to West Virginia residents. The passage of the proposed legislation would create a loss in General Revenue collections of $14.0 million per year beginning in FY2022. Additional administrative costs incurred by the State Tax Department would be $5,000 for FY2021.



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 5,000 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 5,000 0 0
2. Estimated Total Revenues 0 -14,000,000 -14,000,000


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


The passage of the proposed legislation would create a loss in General Revenue collections of $14.0 million per year beginning in FY2022. The loss from firearms revenue loss would be roughly $11.0 million, and ammunition exemption loss could be roughly $3.0 million. Additional administrative costs incurred by the State Tax Department would be $5,000 for FY2021.



Memorandum


The stated purpose of this bill is to exempt consumer sales tax on sales of firearms and firearm ammunition sold in this state to residents of this state. The bill amends W. Va. Code §11-15-9 by adding an exemption for “sales of firearms and firearm ammunition sold in this state to residents of this state.” Limitation of the exemption so that only nonresidents pay the sales tax on sales of firearms and firearm ammunition, while state residents enjoy an exemption for such sales, constitutes a violation of the Commerce Clause of the United States Constitution.



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