FISCAL NOTE

Date Requested: February 01, 2022
Time Requested: 01:25 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1033 Introduced HB4476
CBD Subject: Labor


FUND(S):

General Revenue Fund, Infrastructure and Jobs Development Council

Sources of Revenue:

General Fund

Legislation creates:

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 reallocate proceeds from the Business and Occupation Tax to West Virginia Infrastructure and Jobs Development over a three-year phase-in, unless otherwise allocated. The provisions of this bill would provide for a shift in Business and Occupation Tax revenue from the General Revenue Fund to the West Virginia Infrastructure and Jobs Development Council in the form of a special revenue fund. In FY2023, one-third of all Business and Occupation Tax revenue would be transferred to the special revenue fund. In FY2024, two-thirds of all Business and Occupation Tax revenue would be transferred, and in FY2025 and thereafter all the Business and Occupation Tax revenue would be allocated to the special revenue fund. The revenue estimates for the Business and Occupation Tax are $118 million for FY2023; $117 million for FY2024, and $115 million in FY2025. The reallocation of Business and Occupation Tax revenue would result in a shift in revenue from the General Revenue Fund to the special fund for the West Virginia Infrastructure and Jobs Development of $39.3 million in FY2023; $78 million in FY2024; and $115 million in FY2025. Administrative costs to the State Tax Department would be $5,000 in FY2023.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2022
Increase/Decrease
(use"-")
2023
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 5,000 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 5,000 0
2. Estimated Total Revenues 0 0 0


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


The provisions of this bill would provide for a shift in Business and Occupation Tax revenue from the General Revenue Fund to the West Virginia Infrastructure and Jobs Development Council in the form of a special revenue fund. In FY2023, one-third of all Business and Occupation Tax revenue would be transferred to the special revenue fund. In FY2024, two-thirds of all Business and Occupation Tax revenue would be transferred, and in FY2025 and thereafter all the Business and Occupation Tax revenue would be allocated to the special revenue fund. The revenue estimates for the Business and Occupation Tax are $118 million for FY2023; $117 million for FY2024, and $115 million in FY2025. The reallocation of Business and Occupation Tax revenue would result in a shift in revenue from the General Revenue Fund to the special fund for the West Virginia Infrastructure and Jobs Development of $39.3 million in FY2023; $78 million in FY2024; and $115 million in FY2025. Administrative costs to the State Tax Department would be $5,000 in FY2023.



Memorandum


The stated purpose of this bill is to reallocate proceeds from the Business and Occupation Tax to West Virginia Infrastructure and Jobs Development over a three-year phase-in, unless otherwise allocated. The three-year phase-in period begins “in fiscal year 2023,” when one third of all B&O Tax revenue not otherwise allocated is to be allocated to the special revenue fund. The allocation will be two thirds “in fiscal year 2024,” and entirely “in fiscal year 2025.” The bill does not define a fiscal year. Generally, “fiscal year 2023” could be interpreted as the state’s fiscal year that starts on July 1, 2022 and ends after June 30, 2023. The bill provides that the phase-in begins “in” a fiscal year, instead of on a date certain, leaving open the possibility that the phase-in could begin at any time throughout the year. The word “hereafter” in line 10 means that in year three and every year thereafter all of the B&O Tax went to the special revenue fund though this could be stated more clearly. At the state level, the B&O Tax applies to only a relative few public service and utility businesses. Several municipalities also impose their own B&O Taxes. The title of the bill states that it relates to “the reallocation of all Business and Occupation tax revenue” without differentiating between state and local taxes.



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