FISCAL NOTE
Date Requested: January 09, 2019
Time Requested: 05:42 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1277 |
Introduced |
SB83 |
|
|---|
| CBD Subject: |
Military and Veterans, Public Safety |
|---|
|
FUND(S):
Veterans' Facilty Support Fund
Sources of Revenue:
Other Fund Veterans' Facility Support Fund
Legislation creates:
Creates New Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to find sufficient funding for the Veterans’ Facility Support Fund to fund a veteran’s nursing home and improve funding to volunteer fire departments by eliminating a current tax exemption and redirecting certain revenue.
Based on our interpretation, the proposed bill would remove the exemption from Consumers Sales Tax Law for memberships or services provided by health and fitness organizations effective July 1, 2019. The bill dedicates the monies collected from removing this exemption to the Veterans’ Facility Support Fund account in the State Treasury. In addition, the bill would redirect the distribution of the portion of Fireworks Safety Fees currently dedicated to the Veterans’ Facility Support Fund to the Fire Protection Fund.
The proposed bill could result in roughly $2.0 million per year in transfers to the Veterans’ Facility Support Fund as a result of diverting monies from the repealed sales tax exemption but would remove roughly $0.5 million per year in transfers from proceeds of the Fireworks Safety Fee. As a result, net benefit to the Veterans’ Facility Support Fund is expected to be $1.4 million in FY2020 and $1.6 million per year for each year thereafter. We note that the FY2020 net benefit includes consideration of a partial year of collections from repealing the sales tax exemption for memberships or services provided by health and fitness organizations.
As written, it is unclear what would happen to sales tax collections resulting from repeal of this exemption for sales occurring in Sales Tax Increment Financing (STIF) districts or municipalities that levy a local sales tax. This fiscal note only addresses the impact associated with the State sales tax.
Additional administrative costs incurred by the State Tax Department are expected to be $25,000 in FY2019 and $10,000 in FY2020.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
25,000 |
10,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
25,000 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
1,400,000 |
1,600,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill would remove the exemption from Consumers Sales Tax Law for memberships or services provided by health and fitness organizations effective July 1, 2019. The bill dedicates the monies collected from removing this exemption to the Veterans’ Facility Support Fund account in the State Treasury. In addition, the bill would redirect the distribution of the portion of Fireworks Safety Fees currently dedicated to the Veterans’ Facility Support Fund to the Fire Protection Fund.
The proposed bill could result in roughly $2.0 million per year in transfers to the Veterans’ Facility Support Fund as a result of diverting monies from the repealed sales tax exemption but would remove roughly $0.5 million per year in transfers from proceeds of the Fireworks Safety Fee. As a result, net benefit to the Veterans’ Facility Support Fund is expected to be $1.4 million in FY2020 and $1.6 million per year for each year thereafter. We note that the FY2020 net benefit includes consideration of a partial year of collections from repealing the sales tax exemption for memberships or services provided by health and fitness organizations.
As written, it is unclear what would happen to sales tax collections resulting from repeal of this exemption for sales occurring in Sales Tax Increment Financing (STIF) districts or municipalities that levy a local sales tax. This fiscal note only addresses the impact associated with the State sales tax.
Additional administrative costs incurred by the State Tax Department are expected to be $25,000 in FY2019 and $10,000 in FY2020.
Memorandum
The stated purpose of this bill is to find sufficient funding for the Veterans’ Facility Support Fund to fund a veteran’s nursing home and improve funding to volunteer fire departments by eliminating a current tax exemption and redirecting certain revenue.
The bill accomplishes it purpose, however, it does not address the exception of rendering personal services by personal trainers under W.Va. Code §11-15-8. The exception under section 8 and the Sales and Use Tax exemption under section 9 may overlap.
There may be a typographical error in W.Va. Code §11-15-9, line 242: “a veteran’s nursing home” rather than “a veterans” nursing home.”
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov