FISCAL NOTE
Date Requested: January 11, 2023
Time Requested: 10:27 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1682 |
Introduced |
SB14 |
|
|---|
| CBD Subject: |
Environment |
|---|
|
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 dedicate tax proceeds from the sale of parts, tires, and repair services for motor vehicles to the State Road Fund for the purpose of construction, repair, and maintenance of public roads.
The bill would require the Consumer Sales and Service Tax collected from the sale of parts and tires for motor vehicles and repair and maintenance services for motor vehicles to be deposited to the State Road Fund. The tax collected and deposited to the State Road Fund could only be used for construction, reconstruction, maintenance and repair of highways, and payment of principle and interest on state bonds issued for highway purposes. For purposes of the bill, “motor vehicle” means every propellable device in or upon which any person or property is or may be transported or drawn upon a highway including, but not limited to: automobiles, buses, motor homes, motorcycles, all-terrain vehicles, utility terrain vehicles, street-legal special purpose vehicles, low-speed vehicles, trucks, truck tractors, trailers, semitrailers, and full trailers. Per W.Va. Code §11-10-5p, since the bill has no internal effective date, the legislation, if passed, would become effective January 1, 2024.
Based on our interpretation, the proposed legislation would divert the following collections from General Revenue Fund to the State Road Fund: $37.6 million in FY2024, $92.3 million in FY2025, and by increasing amounts in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $71,000 in FY2024 and $44,500 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
71,000 |
44,500 |
| Personal Services |
0 |
44,500 |
44,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,500 |
0 |
| Other |
0 |
25,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-3,760,000 |
-92,300,000 |
Explanation of above estimates (including long-range effect):
The bill would require the Consumer Sales and Service Tax collected from the sale of parts and tires for motor vehicles and repair and maintenance services for motor vehicles to be deposited to the State Road Fund. The tax collected and deposited to the State Road Fund could only be used for construction, reconstruction, maintenance and repair of highways, and payment of principle and interest on state bonds issued for highway purposes. For purposes of the bill, “motor vehicle” means every propellable device in or upon which any person or property is or may be transported or drawn upon a highway including, but not limited to: automobiles, buses, motor homes, motorcycles, all-terrain vehicles, utility terrain vehicles, street-legal special purpose vehicles, low-speed vehicles, trucks, truck tractors, trailers, semitrailers, and full trailers. Per W.Va. Code §11-10-5p, since the bill has no internal effective date, the legislation, if passed, would become effective January 1, 2024.
Based on our interpretation, the proposed legislation would divert the following collections from General Revenue Fund to the State Road Fund: $37.6 million in FY2024, $92.3 million in FY2025, and by increasing amounts in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $71,000 in FY2024 and $44,500 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to dedicate tax proceeds from the sale of parts, tires, and repair services for motor vehicles to the State Road Fund for the purpose of construction, repair, and maintenance of public roads.
The bill provides that the sales tax proceeds collected from the sale of “parts and tires for motor vehicles and repair and maintenance services for motor vehicles” shall be deposited in the State Road Fund and used only for the purposes of construction, reconstruction, maintenance and repair of highways, and the payment of principal and interest on state bonds issued for highway purposes. The bill defines “motor vehicle” differently than how that term is defined in W.Va. Code §11-15-3c(c) (application of sales tax to motor vehicle sales). The bill does not define “highway,” but there is an existing definition for “highway” in W.Va. Code §11-14C-2(50). The bill does not define “parts”, and that term could be susceptible to very wide interpretation.
To fulfill the requirements of the bill, entities that collect and remit Consumer Sales and Service and Use tax will have to specifically identify the amount of their remittance that is attributable to sales of parts, tires, and repair and maintenance services for motor vehicles. For audit purposes, those entities would have to keep records segregating those sales from other sales that they make. New rules and forms would probably be necessary.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov