FISCAL NOTE
Date Requested: February 01, 2022
Time Requested: 08:34 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2388 |
Introduced |
SB507 |
|
|---|
| 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 change the threshold jobs creation from 300 to 50; and to making stylistic changes to the language of W.Va. Code ยง11-15-9n, which authorizes an exemption for qualified purchases of computers and computer software, primary material handling equipment, racking and racking systems, and components, building materials and certain tangible property to be incorporated into a qualified, new or expanded warehouse or distribution facility.
According to our interpretation of this bill, the Consumer Sales and Use Tax exemption related to qualified purchases of selected property and services for a new or expanded warehouse or distribution facility is modified by decreasing the West Virginia resident employment requirement from 300 to 50 West Virginia residents, effective for tax years on or after January 1, 2023. There is no cost for the current Consumer Sales and Use Tax code provision. Although we cannot estimate the revenue impact of tax exemptions related to qualified purchases of businesses with 50 or more resident employees, it could result in some sales tax loss to the General Revenue Fund in FY2024 and subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $1,000 in FY2023.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
1,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
1,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation of this bill, the Consumer Sales and Use Tax exemption related to qualified purchases of selected property and services for a new or expanded warehouse or distribution facility is modified by decreasing the West Virginia resident employment requirement from 300 to 50 West Virginia residents, effective for tax years on or after January 1, 2023. There is no cost for the current Consumer Sales and Use Tax code provision. Although we cannot estimate the revenue impact of tax exemptions related to qualified purchases of businesses with 50 or more resident employees, it could result in some sales tax loss to the General Revenue Fund in FY2024 and subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $1,000 in FY2023.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov