FISCAL NOTE
Date Requested: January 24, 2023
Time Requested: 01:06 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2919 |
Introduced |
HB3005 |
|
|---|
| CBD Subject: |
Actions, Suits and Liens |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to accelerate the change in the transfer tax so that it is payable only to the counties.
According to our interpretation of this bill, beginning July 1, 2023, the county portion of the State Property Transfer Tax would be increased from 20 percent to 65 percent. By July 1, 2024, the proposed change would convert the State Property Transfer Tax to a County Property Transfer Tax. Passage of this bill would result in a reduction of $5.0 million to the General Revenue Fund in FY2024 and a reduction of $11.7 million to the General Revenue Fund in FY2025.
There would be no additional administrative costs incurred by the State Tax Department.
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 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-5,000,000 |
-11,700,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation of this bill, beginning July 1, 2023, the county portion of the State Property Transfer Tax would be increased from 20 percent to 65 percent. By July 1, 2024, the proposed change would convert the State Property Transfer Tax to a County Property Transfer Tax. Passage of this bill would result in a reduction of $5.0 million to the General Revenue Fund in FY2024 and a reduction of $11.7 million to the General Revenue Fund in FY2025.
There would be no additional administrative costs incurred by the State Tax Department.
Memorandum
The stated purpose of this bill is to accelerate the change in the transfer tax so that it is payable only to the counties.
The mathematical apportionment of the proposed changes in the Property Transfer Tax lacks clarity. This bill assumes that only the first ten percent from 2021 of the Property Transfer Tax has been applied. Notably, the bill is missing a distribution of the Property Transfer Tax from 2022. This leaves 90% to be distributed from 2023 and 2024. As the bill is written now, a county could stand to receive 110% of the Property Transfer Tax beginning on July 1, 2025.
Additionally, this bill needs further clarity. For example, references to “state tax” and “state excise tax” in subsections (a) and (b) should probably be removed if the bill’s intent is to make this a county excise tax.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov