FISCAL NOTE

Date Requested: January 13, 2016
Time Requested: 05:29 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
1059 Introduced SB54
CBD Subject: Tax


FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The stated purpose of this bill is to change the way taxes are collected from homeowner associations when homeowners’ association dues, fees and assessments are used for common expenses. This bill proposes to exempt homeowners’ association dues from the Consumers Sales and Service Tax. As a result, there would be minimal revenue loss to the General Revenue Fund from the passage of this bill. Additional administrative costs to the State Tax Department would be $1,000 per year beginning in FY 2017.



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 0 1,000 1,000
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 1,000 1,000
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


This bill proposes to exempt homeowners’ association dues from the Consumers Sales and Service Tax. As a result, there would be minimal revenue loss to the General Revenue Fund from the passage of this bill. Additional administrative costs to the State Tax Department would be $1,000 per year beginning in FY 2017.



Memorandum


The stated purpose of this bill is to change the way taxes are collected from homeowner associations when homeowners’ association dues, fees and assessments are used for common expenses. The language in the title and purpose of the bill asserting that “the way tax is collected on homeowners’ associations is changed is not accurate” and, “the issue of collections is not even addressed. This could constitute a title defect.” The bill does purport to exempt from consumers sales and service tax liability the dues, fees and assessments paid by members to homeowners’ associations when used for payment of common expenses. The passage of this bill would codify the position the Tax Department has been taking for several years on this issue.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov