FISCAL NOTE

Date Requested: February 10, 2022
Time Requested: 03:56 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2633 Introduced HB4616
CBD Subject: Taxation


FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

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 sales of tangible personal property to safely store firearms, including, but not limited to, safes and trigger locks from the consumer sales tax. According to our interpretation, the proposed bill would create an exemption from Consumer Sales and Use Tax for all sales of tangible personal property used to safely store firearms. The exemption would apply to sales made on or after the effective date of the amendment which is July 1, 2022. Based on the assumption that the exemption covers safes and trigger locks only, passage of the proposed legislation would result in a loss in General Revenue collections of $46,000 in FY2023 and a loss of $50,000 in subsequent fiscal years. Additional administrative cost incurred by the State Tax Department would be $5,000 in FY2022.



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 5,000 0 0
Personal Services 5,000 0 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 -46,000 -50,000


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


According to our interpretation, the proposed bill would create an exemption from Consumer Sales and Use Tax for all sales of tangible personal property used to safely store firearms. The exemption would apply to sales made on or after the effective date of the amendment which is July 1, 2022. Based on the assumption that the exemption covers safes and trigger locks only, passage of the proposed legislation would result in a loss in General Revenue collections of $46,000 in FY2023 and a loss of $50,000 in subsequent fiscal years. Additional administrative cost incurred by the State Tax Department would be $5,000 in FY2022.



Memorandum


The stated purpose of this bill is to exempt sales of tangible personal property to safely store firearms, including, but not limited to, safes and trigger locks from the consumer sales tax. The language of the bill is overly broad, and terms are not adequately defined. Because of the “not limited” clause, any item of tangible personal property capable of containing a firearm would arguable be exempt, merely on the representation of the purchase that its intended use is to store firearms.



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