FISCAL NOTE
Date Requested: February 12, 2025
Time Requested: 09:35 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1071 |
Introduced |
SB109 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
Special Fund, Neighborhood Assistance and Rejuvenation Compact Fund
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Revenue, Creates New Fund: Neighborhood Assistance and Rejuvenation Compact Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The stated purpose of this bill is to create a program to reward citizens for information of drug trafficking; to create an excise tax on opioid antagonists and test strips; create a special revenue account; to establish a program for providing rewards for pertinent information; placing the program with the State Police; giving the Secretary of Homeland Security jurisdiction over the program; set out privacy requirements; providing exclusions; authorizing funding; requiring an application; exempting the reward from taxation and other legal processes.
This bill would impose a one cent tax on each purchase of an opioid antagonist, antagonist kit, or test strip used to test for opioids in addition to the existing state sales tax of six percent. This bill would create a new special revenue fund known as the Neighborhood Assistance and Rejuvenation Compact Fund, which would consist of monies collected by the additional excise tax. This fund would be used to pay rewards to any person who assists law enforcement in preventing narcotics trafficking. According to the most recent data provided by the Centers for Disease Control, West Virginia had the highest per capita rate of overdose death in the United States, through 2022. According to our interpretation, because some opioid antagonists are by prescription and others are over the counter, we cannot access reliable sales data about the purchase of such products. Additionally, the confidentiality of opioid users who are receiving addiction treatment prevents us from accessing this type of data. Lastly, the ambiguity of certain definitions within the bill would create difficulties in determining the actual level of tax of some products. Therefore, we cannot reasonably estimate the revenue impact from the passage of this bill.
Administrative costs incurred by the State Tax Division would be $95,150 in FY2026 and $44,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
95,150 |
44,000 |
| Personal Services |
0 |
44,000 |
44,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
0 |
49,500 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
This bill would impose a one cent tax on each purchase of an opioid antagonist, antagonist kit, or test strip used to test for opioids in addition to the existing state sales tax of six percent. This bill would create a new special revenue fund known as the Neighborhood Assistance and Rejuvenation Compact Fund, which would consist of monies collected by the additional excise tax. This fund would be used to pay rewards to any person who assists law enforcement in preventing narcotics trafficking. According to the most recent data provided by the Centers for Disease Control, West Virginia had the highest per capita rate of overdose death in the United States, through 2022. According to our interpretation, because some opioid antagonists are by prescription and others are over the counter, we cannot access reliable sales data about the purchase of such products. Additionally, the confidentiality of opioid users who are receiving addiction treatment prevents us from accessing this type of data. Lastly, the ambiguity of certain definitions within the bill would create difficulties in determining the actual level of tax of some products. Therefore, we cannot reasonably estimate the revenue impact from the passage of this bill.
Administrative costs incurred by the State Tax Division would be $95,150 in FY2026 and $44,000 in subsequent fiscal years.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
The stated purpose of this bill is to create a program to reward citizens for information of drug trafficking; to create an excise tax on opioid antagonists and test strips; create a special revenue account; to establish a program for providing rewards for pertinent information; placing the program with the State Police; giving the Secretary of Homeland Security jurisdiction over the program; set out privacy requirements; providing exclusions; authorizing funding; requiring an application; exempting the reward from taxation and other legal processes.
The excise tax imposed on the sale of opioid antagonists and test strips is in addition to the sales and use tax and is levied at the rate of “one cent on each purchase of an opioid antagonist, an opioid antagonist kit, or test strips used to test for opioids.” The lack of a definition for “opioid antagonist kit” may be problematic. Furthermore, the bill title states that the excise tax is on “opioid antagonists and test strips,” and does not mention that the tax also applies to an “opioid antagonist kit.” This may constitute a title defect.
The bill is silent regarding who is responsible for collecting or paying the tax. Although it may be possible to assume from context that the tax is to be paid by the retail seller, the fact that the bill designates the tax as “in addition to” the sales and use tax may imply that it should be collected from the purchaser, held in trust by the vendor, and remitted to the Tax Commissioner by the vendor similarly to how the sales and use tax works. This should be made explicit.
Person submitting Fiscal Note: Mark Muchow
Email Address: radfiscal@wv.gov