FISCAL NOTE
Date Requested: January 23, 2020
Time Requested: 03:48 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2769 |
Introduced |
HB2749 |
|
|---|
| CBD Subject: |
Actions, Suits and Liens |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to allow quarterly payment of real and personal property taxes and to require new tax tickets to be mailed after property is transferred.
As written, this bill provides that beginning July 1, 2019, current taxes on real and personal property may be paid as follows: the first quarterly installment is payable on September 1 of the year for which the assessment is made and becomes delinquent on October 1; the second quarterly installment is payable on the following January 1 and becomes delinquent on February 1; the third quarterly installment is payable on the following March 1 and becomes delinquent on April 1, and the fourth quarterly installment is payable on the following August 1 and becomes delinquent on September 1. This could be problematic since the beginning date of the change has already passed.
According to our interpretation, passage of this bill would not change the amount of current taxes assessed and due on real and personal property. However, since the proposed fourth quarterly installment would be made in a fiscal year different from the first three quarterly installments, there would be a one-time shift in funds that would have been collected in for the first fiscal year. The State Tax Department does not have sufficient information to determine how much revenue would be moved out of the first fiscal year because some taxpayers would continue paying their bill either once a year or possibly in two or three installments. The change in revenue deposit timing would significantly impact county budgets, school budgets and municipal budgets for the first fiscal year. There would also be an impact to the State General Revenue Fund if the Legislature desires to incorporate the expected shift in funding into School Aid Formula. Assuming that some current tax collections are deposited into interest bearing accounts prior to their expenditure, the additional installment payments may result in a minor reduction in earned interest.
Passage of this bill would result in some additional administrative costs to county sheriff’s offices and to the State Auditor’s Office that collects public utility taxes.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
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 |
0 |
0 |
Explanation of above estimates (including long-range effect):
As written, this bill provides that beginning July 1, 2019, current taxes on real and personal property may be paid as follows: the first quarterly installment is payable on September 1 of the year for which the assessment is made and becomes delinquent on October 1; the second quarterly installment is payable on the following January 1 and becomes delinquent on February 1; the third quarterly installment is payable on the following March 1 and becomes delinquent on April 1, and the fourth quarterly installment is payable on the following August 1 and becomes delinquent on September 1. This could be problematic since the beginning date of the change has already passed.
According to our interpretation, passage of this bill would not change the amount of current taxes assessed and due on real and personal property. However, since the proposed fourth quarterly installment would be made in a fiscal year different from the first three quarterly installments, there would be a one-time shift in funds that would have been collected in for the first fiscal year. The State Tax Department does not have sufficient information to determine how much revenue would be moved out of the first fiscal year because some taxpayers would continue paying their bill either once a year or possibly in two or three installments. The change in revenue deposit timing would significantly impact county budgets, school budgets and municipal budgets for the first fiscal year. There would also be an impact to the State General Revenue Fund if the Legislature desires to incorporate the expected shift in funding into School Aid Formula. Assuming that some current tax collections are deposited into interest bearing accounts prior to their expenditure, the additional installment payments may result in a minor reduction in earned interest.
Passage of this bill would result in some additional administrative costs to county sheriff’s offices and to the State Auditor’s Office that collects public utility taxes.
Memorandum
The stated purpose of this bill is to allow quarterly payment of real and personal property taxes and to require new tax tickets to be mailed after property is transferred.
The beginning date of the change (July 1, 2019) may be problematic as that date has already passed.
The bill would also require assessors to notify the sheriff of property transfers within three months of the filing of the deed. The sheriff would then be required to prepare a new tax ticket and mail it to the new property owner. Currently, the tax bill is sent to the person who was the owner of record as of the assessment date. When the property is sold after that date, it is often the case that the former owner receives a tax bill the following year for property that he or she no longer owns. This change attempts to correct that problem.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov