FISCAL NOTE
Date Requested: February 01, 2016
Time Requested: 01:32 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1826 |
Introduced |
SB328 |
|
|---|
| CBD Subject: |
Military and Veterans |
|---|
|
FUND(S):
General Revenue Fund, West Virginia Veterans Program Fund
Sources of Revenue:
General Fund,Special Fund
Legislation creates:
A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to provide a West Virginia Veterans Program Fund and to regulate the sale and use of fireworks.
Based on our interpretation, the proposed bill would generate approximately $2.6 million in revenues in the first fiscal year of implementation. This amount is mostly comprised of collections from the fireworks safety fee of 10 percent, estimated to generate $1.5 million annually, which will be initially deposited in the General Revenue Fund with quarterly distributions to the West Virginia Veterans Program Fund. A provision is in place for 1 percent fee (approximately $15,000 annually) to be withheld by the Tax Commissioner for the administration of the tax.
Also included in the estimate is approximately $900,000 in sales tax collections from the sales of fireworks to be deposited in the General Revenue Fund and approximately $0.2 million in registration and certificate fees for retailers. Approximately $9,600 of the registration and certificate fees are dedicated to the State Fire Marshal to offset costs incurred by the proposed bill, while the distribution of the remainder of registration and certificate fee collections are not specified. An estimate for public fireworks displays revenues is not included in this revenue impact, as the fee for these displays was not specified. It is unlikely this will result in substantial revenue gains.
Additional administrative costs incurred by the State Tax Department would be $5,600 for the remainder of FY2016, $141,400 in FY2017 and $75,000 for each year thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
5,600 |
141,400 |
75,000 |
| Personal Services |
0 |
75,000 |
75,000 |
| Current Expenses |
450 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
14,000 |
0 |
| Other |
5,150 |
52,400 |
0 |
| 2. Estimated Total Revenues |
0 |
2,600,000 |
2,600,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill would generate approximately $2.6 million in revenues in the first fiscal year of implementation. This amount is mostly comprised of collections from the fireworks safety fee of 10 percent, estimated to generate $1.5 million annually, which will be initially deposited in the General Revenue Fund with quarterly distributions to the West Virginia Veterans Program Fund. A provision is in place for 1 percent fee (approximately $15,000 annually) to be withheld by the Tax Commissioner for the administration of the tax.
Also included in the estimate is approximately $900,000 in sales tax collections from the sales of fireworks to be deposited in the General Revenue Fund and approximately $0.2 million in registration and certificate fees for retailers. Approximately $9,600 of the registration and certificate fees are dedicated to the State Fire Marshal to offset costs incurred by the proposed bill, while the distribution of the remainder of registration and certificate fee collections are not specified. An estimate for public fireworks displays revenues is not included in this revenue impact, as the fee for these displays was not specified. It is unlikely this will result in substantial revenue gains.
Additional administrative costs incurred by the State Tax Department would be $5,600 for the remainder of FY2016, $141,400 in FY2017 and $75,000 for each year thereafter.
Memorandum
The stated purpose of this bill is to provide a West Virginia Veterans Program Fund and to regulate the sale and use of fireworks.
There may be a title defect. The definition of “[f]irework” or “fireworks” in the bill specifically excludes “sparkling devices, novelties and toy caps and model rockets.” This may cause the title to be found defective as the title speaks to the regulating of “fireworks,” not to these other devices.
Although the bill infers that “toy caps” can be manufactured, sold, distributed, imported or stored with a license, registration, certificate or permit issued from the State Fire Marshal, it fails to include “toy caps” as an item which can be sold if registered with the State Fire Marshal in West Virginia Code §29-3E-4(a).
The proposed bill requires government subdivisions and any other organizations presenting a fireworks display to obtain a permit from the State Fire Marshal, but the amount of this permit and the disbursement of collections are not specified. Similarly, disbursement of collected retailer certification fees is not specified.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov