FISCAL NOTE

Date Requested: February 17, 2020
Time Requested: 12:46 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
3226 Introduced SB816
CBD Subject: Taxation


FUND(S):

General Revenue Fund, local governments

Sources of Revenue:

General Fund local property tax

Legislation creates:





Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The stated purpose of this bill is to update the North American Industrial Code (NAIC) reference in the definition of “manufacturing” as used in W.Va. Code §11-6F-2 and 11-13S-3 from 211112 to 211130 but only to the extent the classification applies to the process of raw natural gas or oil to recover the liquid hydrocarbons, which activity is classified under 211130. According to our interpretation, the provisions of this bill provide a technical change in response to a North American Industrial Classification System change in categorization of natural gas liquid processing plants from NAICS code 211112 to 211130. When an eligible taxpayer converts the natural gas into liquid hydrocarbons within a processing facility, this process would qualify as manufacturing. This bill has no revenue impact. Additional administrative costs incurred by the State Tax Department would be $1,000 in FY2022. Administrative costs incurred by the State Property Tax Division and local governments would be minimal.



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 0 1,000
Personal Services 0 0 1,000
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 0


Explanation of above estimates (including long-range effect):


According to our interpretation, the provisions of this bill provide a technical change in response to a North American Industrial Classification System change in categorization of natural gas liquid processing plants from NAICS code 211112 to 211130. When an eligible taxpayer converts the natural gas into liquid hydrocarbons within a processing facility, this process would qualify as manufacturing. This bill has no revenue impact. Additional administrative costs incurred by the State Tax Department would be $1,000 in FY2022. Administrative costs incurred by the State Property Tax Division would be minimal.



Memorandum






    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov