FISCAL NOTE
Date Requested: January 30, 2019
Time Requested: 02:42 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2843 |
Introduced |
HB2745 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
State Road Fund
Sources of Revenue:
Other Fund State Road 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 authorize railroad locomotives and commercial watercraft to claim the refundable exemption from the variable component of the motor fuel excise tax, and to remove the aggregate annual exemption limitation formerly imposed on railroads on and after July 1, 2019.
According to our interpretation of the bill as of July 1, 2019, the current Motor Fuel Use Tax variable rate refundable exemption cap of $4,300,000 per year would be removed to allow both commercial watercraft and railroad diesel locomotives to claim this exemption. Historically, railroad diesel locomotives and commercial watercraft were only eligible for the State Flat Rate component exemption of the Motor Fuel Tax, however on January 1, 2018, railroad diesel locomotives were allowed a variable rate Motor Fuel Use Tax refundable exemption of up to $4,300,000. The current State Motor Fuel Tax flat rate is 20.5 cents per gallon and the State variable rate is 15.2 cents per gallon, resulting in a combined rate of 35.7 cents per gallon. Passage of this bill would increase the net value of the railroad locomotive exemption by $0.9 million while commercial watercraft would gain an additional $1.5 million refundable exemption, resulting in losses to the State Road Fund of $2.4 million in FY2020 and thereafter.
Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2019 and $15,000 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 |
5,000 |
15,000 |
0 |
| Personal Services |
5,000 |
5,000 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-2,400,000 |
-2,400,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation of the bill as of July 1, 2019, the current Motor Fuel Use Tax variable rate refundable exemption cap of $4,300,000 per year would be removed to allow both commercial watercraft and railroad diesel locomotives to claim this exemption. Historically, railroad diesel locomotives and commercial watercraft were only eligible for the State Flat Rate component exemption of the Motor Fuel Tax, however on January 1, 2018, railroad diesel locomotives were allowed a variable rate Motor Fuel Use Tax refundable exemption of up to $4,300,000. The current State Motor Fuel Tax flat rate is 20.5 cents per gallon and the State variable rate is 15.2 cents per gallon, resulting in a combined rate of 35.7 cents per gallon. Passage of this bill would increase the net value of the railroad locomotive exemption by $0.9 million while commercial watercraft would gain an additional $1.5 million refundable exemption, resulting in losses to the State Road Fund of $2.4 million in FY2020 and thereafter.
Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2019 and $15,000 in FY2020.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov