FISCAL NOTE
Date Requested: February 18, 2016
Time Requested: 10:02 AM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1826 |
Comm. Sub. |
SB328 |
|
|---|
| CBD Subject: |
Military and Veterans |
|---|
|
FUND(S):
General Revenue Fund, West Virginia Veterans Program Fund, Fire Protection Fund
Sources of Revenue:
General Fund,Special 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 provide a West Virginia Veterans Program Fund and to regulate the sale and use of fireworks.
Based on our interpretation, the proposed bill would generate approximately $3.1 million in revenues in the first fiscal year of implementation. This amount is mostly comprised of collections from the fireworks safety fee of 12 percent, estimated to generate $1.8 million annually, which will be initially deposited in the General Revenue Fund with quarterly distributions to the West Virginia Veterans Program Fund (five-sixths of net collections, roughly $1.5 million annually) and the Fire Protection Fund (one-sixth of net collections, roughly $300,000 annually). A provision is in place for 1 percent fee (approximately $18,000 annually) to be withheld by the Tax Commissioner for the administration of the tax.
Also included in the estimate is approximately $900,000 in sales tax collections from the sales of fireworks to be deposited in the General Revenue Fund and up to $400,000 in registration and certificate fees for retailers. Approximately $9,600 of the registration and certificate fees are dedicated to the State Fire Marshal to offset costs incurred by the proposed bill, while the distribution of the remainder of registration and certificate fee collections is not specified. An estimate for public fireworks displays revenues is not included in this revenue impact, as the fee for these displays was not specified. It is unlikely this will result in substantial revenue gains.
Additional administrative costs incurred by the State Tax Department would be $5,600 for the remainder of FY2016, $135,400 in FY2017 and $75,000 for each 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 |
5,600 |
135,400 |
75,000 |
| Personal Services |
0 |
75,000 |
75,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
14,000 |
0 |
| Other |
5,510 |
46,400 |
0 |
| 2. Estimated Total Revenues |
0 |
3,100,000 |
3,100,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill would generate approximately $3.1 million in revenues in the first fiscal year of implementation. This amount is mostly comprised of collections from the fireworks safety fee of 12 percent, estimated to generate $1.8 million annually, which will be initially deposited in the General Revenue Fund with quarterly distributions to the West Virginia Veterans Program Fund (five-sixths of net collections, roughly $1.5 million annually) and the Fire Protection Fund (one-sixth of net collections, roughly $300,000 annually). A provision is in place for 1 percent fee (approximately $18,000 annually) to be withheld by the Tax Commissioner for the administration of the tax.
Also included in the estimate is approximately $900,000 in sales tax collections from the sales of fireworks to be deposited in the General Revenue Fund and up to $400,000 in registration and certificate fees for retailers. Approximately $9,600 of the registration and certificate fees are dedicated to the State Fire Marshal to offset costs incurred by the proposed bill, while the distribution of the remainder of registration and certificate fee collections is not specified. An estimate for public fireworks displays revenues is not included in this revenue impact, as the fee for these displays was not specified. It is unlikely this will result in substantial revenue gains.
Additional administrative costs incurred by the State Tax Department would be $5,600 for the remainder of FY2016, $135,400 in FY2017 and $75,000 for each year thereafter.
Memorandum
The stated purpose of this bill is to provide a West Virginia Veterans Program Fund and to regulate the sale and use of fireworks.
In the proposed bill, certification to sell “consumer fireworks” appears to be administered by the State Fire Marshal, although language specifically stating this is lacking in the Committee Substitute.
The sale of “toy caps” appears not to have been addressed in the Committee Substitute. Under current law, “toy caps” or “explosive caps designed to be fired in toy pistols” are considered “sparklers and novelties” and can be sold as long as the retailer has paid the “Sparkler and Novelty Registration Fee” and has a valid business registration certificate. Under the Committee Substitute, however, “[t]oy caps” are specifically exempted from the definition of both “[f]irework” or “fireworks” and “[n]ovelties.” It also does not meet the American Pyrotechnics Association definition of “[s]parkling devices.” These items cannot be sold under the registration allowing for the sale of sparkling devices and novelties, nor can they be sold under the certificate to sell consumer fireworks.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov