FISCAL NOTE
Date Requested: April 02, 2025
Time Requested: 05:13 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3682 |
Comm. Sub. |
SB748 |
|
|---|
| CBD Subject: |
Counties; Taxation |
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|
FUND(S):
Local Sales Tax and Excise Tax Administration Fund
Sources of Revenue:
Other Fund Local Sales Tax and Excise Tax Administration Fund
Legislation creates:
Creates New Revenue, Creates New Expense
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to create the Safer Communities Act. The bill states legislative findings and declarations; provides definitions; authorizes counties to levy a public safety sales or amusement tax; requires notification to certain offices; provides for severability; and provides exclusions.
Per our interpretation, the bill would create the “Safer Communities Act.” Effective July 1, 2026, any county that is current in payment of all state fees may enact the Safer Communities Act. Any county wishing to participate in the Safer Communities Act and levy a public safety sales tax or amusement tax as set forth under the Act shall, by ballot referendum, determine the will of the voters of a county that a county public safety sales tax or amusement tax is necessary. Upon approval of a public safety sales tax or amusement tax, the county commission shall issue an order that imposes the tax.
The maximum county public safety sales tax or amusement tax which may be imposed is one percent of the purchase price of items subject to the sales tax or amusement tax. Any sales tax or amusement tax adopted by a county commission under the Safer Community Act would not apply to a municipality that participates in the Home Rule Program or that currently imposes an amusement tax or a municipal sales and service or municipal use tax. In addition, voters who reside in a municipality that is excluded would not be eligible to vote on the referendum. Counties would be required to use the services of the Tax Commissioner to administer, enforce, and collect the tax. The proceeds of the tax may only be used by the county for the benefit of public safety and emergency services and to provide county boards of education with resources for school resource officers.
According to our interpretation, if all counties choose to participate and imposed the maximum level of sales tax, the Safer Communities Act would generate up to $160 million per year. Nearly all revenues would be attributable to the optional sales tax. The provisions of this bill would also likely result in greater expansion of local municipal sales taxes as more towns opt to keep the local sales tax generated within their corporate limits. Therefore, the base of the local county sales tax could shrink somewhat over time.
The optional local amusement tax is currently not defined in State code but rather in the individual local municipal ordinances for the few cities opting to impose such a tax with some generally minor variances in definition from municipality to municipality. In FY2025, only five municipalities reported a budgeted amount for amusement tax with the Statewide total of just $312,900 at a tax rate of 2.0 percent. It appears as if the proposed bill provides for counties to choose between a sales tax option or an amusement tax option with maximum local tax rate on an amusement activity set at 1.0 percent.
Additional administrative costs incurred by the State Tax Department would be $56,650 in FY 2025, and $47,500 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 |
56,650 |
47,500 |
47,500 |
| Personal Services |
5,500 |
47,500 |
47,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
1,650 |
0 |
0 |
| Other |
49,500 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Per our interpretation, the bill would create the “Safer Communities Act.” Effective July 1, 2026, any county that is current in payment of all state fees may enact the Safer Communities Act. Any county wishing to participate in the Safer Communities Act and levy a public safety sales tax or amusement tax as set forth under the Act shall, by ballot referendum, determine the will of the voters of a county that a county public safety sales tax or amusement tax is necessary. Upon approval of a public safety sales tax or amusement tax, the county commission shall issue an order that imposes the tax.
The maximum county public safety sales tax or amusement tax which may be imposed is one percent of the purchase price of items subject to the sales tax or amusement tax. Any sales tax or amusement tax adopted by a county commission under the Safer Community Act would not apply to a municipality that participates in the Home Rule Program or that currently imposes an amusement tax or a municipal sales and service or municipal use tax. In addition, voters who reside in a municipality that is excluded would not be eligible to vote on the referendum. Counties would be required to use the services of the Tax Commissioner to administer, enforce, and collect the tax. The proceeds of the tax may only be used by the county for the benefit of public safety and emergency services and to provide county boards of education with resources for school resource officers.
According to our interpretation, if all counties choose to participate and imposed the maximum level of sales tax, the Safer Communities Act would generate up to $160 million per year. Nearly all revenues would be attributable to the optional sales tax. The provisions of this bill would also likely result in greater expansion of local municipal sales taxes as more towns opt to keep the local sales tax generated within their corporate limits. Therefore, the base of the local county sales tax could shrink somewhat over time.
The optional local amusement tax is currently not defined in State code but rather in the individual local municipal ordinances for the few cities opting to impose such a tax with some generally minor variances in definition from municipality to municipality. In FY2025, only five municipalities reported a budgeted amount for amusement tax with the Statewide total of just $312,900 at a tax rate of 2.0 percent. It appears as if the proposed bill provides for counties to choose between a sales tax option or an amusement tax option with maximum local tax rate on an amusement activity set at 1.0 percent.
Additional administrative costs incurred by the State Tax Department would be $56,650 in FY 2025, and $47,500 in subsequent fiscal years.
Memorandum
The purpose of this bill is to create the Safer Communities Act. The bill states legislative findings and declarations; provides definitions; authorizes counties to levy a public safety sales or amusement tax; requires notification to certain offices; provides for severability; and provides exclusions.
The bill defines the term “amusement tax” as defined under W.Va. Code §8-13-6. The term
“Amusement tax” from W.Va. Code §8-13-6 is defined in relation to municipal corporations being granted plenary power and authority to levy and collect an amusement tax. However, W.Va. Code §8-13-6 does not specifically define what an “amusement tax” is. It simply provides that municipalities may levy and collect an admission or amusement tax on “…any public amusement or entertainment conducted within the corporate limits thereof for private profit or gain”.
There is a typo in section 7-28-7(b), “….to adopt an amusement tax, a municipal sales and service of a municipal use tax in the future….”. The word “of” should be changed to “or”.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov