FISCAL NOTE
Date Requested: February 23, 2016 Time Requested: 02:43 PM |
Agency: |
Tax Department, State |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2611 |
Introduced |
HB4682 |
|
CBD Subject: |
|
---|
|
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 enact the agricultural and tourism development act. It covers wineries, farm wineries, micro-breweries and mini-distilleries. A tax credit is provided for capital expenditures, local regulation is limited and the consequences of sales of the business are enunciated.
According to our interpretation, passage of this bill would result in an annual revenue decrease of less than $50,000. This estimate is derived from actual experiences in other states with a similar tax preference. The amount of this proposed tax credit is equal to 25 percent of all the qualified expenditures related to the establishment of a new winery, farm winery, micro-brewer or mini-distiller and capital improvements made to existing wineries, farm wineries, micro-brewers or mini-distillers. The credit may not exceed $250,000 in a calendar year. If the amount of the credit exceeds the taxpayer’s tax liability for the taxable year, the amount which exceeds the tax liability may be carried over up to ten tax years and applied as a credit against the tax liability of the taxpayer.
Additional administrative costs would $19,250 in FY2017 and $10,000 per 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 |
0 |
19,250 |
10,000 |
Personal Services |
0 |
10,000 |
10,000 |
Current Expenses |
0 |
0 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
0 |
9,250 |
0 |
2. Estimated Total Revenues |
0 |
0 |
-50,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, passage of this bill would result in an annual revenue decrease of less than $50,000. This estimate is derived from actual experiences in other states with a similar tax preference. The amount of this proposed tax credit is equal to 25 percent of all the qualified expenditures related to the establishment of a new winery, farm winery, micro-brewer or mini-distiller and capital improvements made to existing wineries, farm wineries, micro-brewers or mini-distillers. The credit may not exceed $250,000 in a calendar year. If the amount of the credit exceeds the taxpayer’s tax liability for the taxable year, the amount which exceeds the tax liability may be carried over up to ten tax years and applied as a credit against the tax liability of the taxpayer.
Additional administrative costs would $19,250 in FY2017 and $10,000 per year thereafter.
Memorandum
The stated purpose of this bill is to enact the agricultural and tourism development act. It covers wineries, farm wineries, micro-breweries and mini-distilleries. A tax credit is provided for capital expenditures, local regulation is limited and the consequences of sales of the business are enunciated.
The total cap per calendar year is $250,000. If the total amount of all applications exceeds $250,000, the State Tax Department would be required to allocate tax credits on a pro-rata basis. There would need to be a cut-off date for application to help prevent excess credit allocation claims.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov