FISCAL NOTE
Date Requested: January 16, 2019
Time Requested: 02:11 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2095 |
Introduced |
SB336 |
|
|---|
| CBD Subject: |
Economic Development, Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to provide tax relief to encourage investment in motorsport entertainment complexes.
According to the provisions of this bill, a qualified company that makes a capital investment of $10 million or more on any motorsports entertainment complex in this State within the five-year period immediately following the approval of the application would receive a Sales and Use Tax exemption on building materials, supplies, fixtures, and equipment for the construction, repair, or improvement of the planned motorsports entertainment complex. If the eligible taxpayer does not meet the capital investment requirements within the five-year period, the qualified company would be liable for the Sales and Use taxes that would have been paid had the approval not been granted in the same proportion as the actual capital investment failed to meet the required capital investment. South Carolina has a similar tax preference since 2018 to promote renovation and expansion of the Darlington SC Motor Speedway, which was already in existence A minimum qualified investment of $10 million could save eligible taxpayers roughly $360,000 per year in Sales and Use Taxes. However, we have no estimate for this bill given that there are no such motorsports entertainment complexes in the State today.
Additional administrative costs to the State Tax Department would be $5,000 in FY2020.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
5,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
5,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to the provisions of this bill, a qualified company that makes a capital investment of $10 million or more on any motorsports entertainment complex in this State within the five-year period immediately following the approval of the application would receive a Sales and Use Tax exemption on building materials, supplies, fixtures, and equipment for the construction, repair, or improvement of the planned motorsports entertainment complex. If the eligible taxpayer does not meet the capital investment requirements within the five-year period, the qualified company would be liable for the Sales and Use taxes that would have been paid had the approval not been granted in the same proportion as the actual capital investment failed to meet the required capital investment. South Carolina has a similar tax preference since 2018 to promote renovation and expansion of the Darlington SC Motor Speedway, which was already in existence A minimum qualified investment of $10 million could save eligible taxpayers roughly $360,000 per year in Sales and Use Taxes. However, we have no estimate for this bill given that there are no such motorsports entertainment complexes in the State today.
Additional administrative costs to the State Tax Department would be $5,000 in FY2020.
Memorandum
The purpose of this bill is to provide tax relief to encourage investment in motorsport entertainment complexes.
It is not clear as to how a particular design would qualify as a NASCAR sanctioned speedway and which entity would determine that. Also, there is some uncertainty as to whether a speedway that might meet certain criteria would be guaranteed that it be sanctioned by NASCAR. The terms “practical plan” as used in §11-28-4(b) needs more clarity, as it is not clear how the Tax Department is to determine whether a motorsport entertainment complex plan is practical.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov