FISCAL NOTE
Date Requested: January 31, 2019
Time Requested: 04:11 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2594 |
Introduced |
HB2678 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to eliminate the personal property tax on new vehicles purchased by and registered to a resident of this state.
As written, the bill provides that new motor vehicles purchased in West Virginia by a West Virginia resident are not subject to Property Taxes if the vehicle is registered in the resident’s name or his or her spouse’s name and the owner continues to reside in West Virginia. This exemption does not apply to a used vehicle. This revenue impact of this proposed exemption would initially be a decrease of $50,000 in State revenue and a loss of almost $12.0 million in local revenue for counties, county boards of education and municipalities. Over a period of several years, an even greater share of total vehicles would become new vehicles. Therefore, annual cost would trend higher over time.
Additional administrative costs to the State Tax Department would be minimal. Administrative costs to county assessors cannot be determined but would involve keeping track of new vehicles as opposed to resale or used vehicles.
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 |
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 |
-12,000,000 |
Explanation of above estimates (including long-range effect):
As written, the bill provides that new motor vehicles purchased in West Virginia by a West Virginia resident are not subject to Property Taxes if the vehicle is registered in the resident’s name or his or her spouse’s name and the owner continues to reside in West Virginia. This exemption does not apply to a used vehicle. This revenue impact of this proposed exemption would initially be a decrease of $50,000 in State revenue and a loss of almost $12.0 million in local revenue for counties, county boards of education and municipalities. Over a period of several years, an even greater share of total vehicles would become new vehicles. Therefore, annual cost would trend higher over time.
Additional administrative costs to the State Tax Department would be minimal. Administrative costs to county assessors cannot be determined but would involve keeping track of new vehicles as opposed to resale or used vehicles.
Memorandum
The stated purpose of this bill is to eliminate the personal property tax on new vehicles purchased by and registered to a resident of this state.
Article X, Section 1 of the W. Va. Constitution requires taxation to be equal and uniform throughout the State, property is taxed in proportion to its value, and no one species of property which is taxed may be taxed higher than any other species of property of equal value. This bill would exempt a certain category of personal property without regard to its use.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov