FISCAL NOTE
Date Requested: March 14, 2017
Time Requested: 01:47 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3193 |
Introduced |
HB3092 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund,Other Fund local property tax
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 clarify, for the purposes of this article, that the fair market value of oil and/or gas producing property is to be calculated through a yield capitalization procedure, using actual operating expenses when provided by the taxpayer.
Based on our interpretation that the State Tax Commissioner will be required to accept the actual operating expenses reported by the taxpayer, the revenue loss association with this proposal would be $49.8 million to local governments and $200,000 to the State.
Additional administrative costs to the State Tax Department would be substantial as the procedure for valuations would change from a mass appraisal environment to well by well calculations. Additional costs to local governments would be minimal.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2017
Increase/Decrease
(use"-") |
2018
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):
Based on our interpretation that the State Tax Commissioner will be required to accept the actual operating expenses reported by the taxpayer, the revenue loss association with this proposal would be $49.8 million to local governments and $200,000 to the State.
Additional administrative costs to the State Tax Department would be substantial as the procedure for valuations would change from a mass appraisal environment to well by well calculations. Additional costs to local governments would be minimal.
Memorandum
The stated purpose of this bill is to clarify, for the purposes of this article, that the fair market value of oil and/or gas producing property is to be calculated through a yield capitalization procedure, using actual operating expenses when provided by the taxpayer.
The bill requires the State Tax Commissioner to accept the actual operating expenses as reported by the taxpayer.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov