FISCAL NOTE
Date Requested: January 31, 2020
Time Requested: 12:03 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2445 |
Introduced |
HB4629 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund, municipal funds
Sources of Revenue:
General Fund municipal funds
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 exempt feminine hygiene products and diapers from state sales tax.
Passage of this bill would add an exemption from sales tax for feminine hygiene products and diapers. The exemption would reduce revenue for both the General Revenue Fund and municipalities that impose a sales tax. Based on our interpretation, passage of this bill would result in a loss to General Revenue Fund collections of roughly $2.0 million in FY2021 and fiscal years thereafter. Passage would also result in a loss of roughly $150,000 in municipal sales tax in FY2021 and all subsequent years. Absent an effective date in the bill, provisions of this bill would become effective on 90 days from passage.
Additional administrative costs incurred by the State Tax Department are expected to be $1,000 in FY2021.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
1,000 |
0 |
| Personal Services |
0 |
1,000 |
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 |
-2,000,000 |
-2,000,000 |
Explanation of above estimates (including long-range effect):
Passage of this bill would add an exemption from state sales tax for feminine hygiene products and diapers. The exemption would reduce revenue for both the General Revenue Fund and municipalities that impose a sales tax. Based on our interpretation, passage of this bill would result in a loss to General Revenue Fund collections of roughly $2.0 million in FY 2021 and all subsequent fiscal years. Passage would also result in a loss of roughly $150,000 FY 2021 and all fiscal years. Absent an effective date in the bill, provisions of this bill would become effective on 90 days from passage.
Additional administrative costs incurred by the State Tax Department are expected to be $1,000 in FY2021.
Memorandum
The stated purpose of this bill is to exempt feminine hygiene products and diapers from state sales tax.
The definitions in the proposed bill may put West Virginia out of compliance with the Streamlined Sales and Use Tax Agreement. The proposed bill does not define “feminine hygiene product” and “diapers” the same as those terms are defined in Appendix C, Part II of, and required by, Article III, Section 327 of the Streamlined Sales and Use Tax Agreement, of which West Virginia is a signatory.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov