FISCAL NOTE

Date Requested: January 17, 2023
Time Requested: 12:38 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2130 Introduced HB2601
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 create a tax exemption for funeral, cremation, and burial services. According to our interpretation, this bill would provide a Sales and Use Tax exemption for funeral, cremation, and burial services. The average cost of a burial in West Virginia is $7,032 while the average cost of cremation in the State is $2,257. The State cremation rate is close to 40 percent. According to the Center for Disease Control and Prevention (CDC), in calendar year 2021 there were 29,676 reported deaths in West Virginia. Passage of this bill would reduce General Revenue Fund collections by nearly $3.8 million in FY2024 and $9.2 million per year in subsequent fiscal years. Additional administrative costs incurred by the State Tax Department would be $1,000 in FY2023.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2023
Increase/Decrease
(use"-")
2024
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 1,000 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 1,000 0 0
2. Estimated Total Revenues 0 -3,800,000 -9,200,000


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


According to our interpretation, this bill would provide a Sales and Use Tax exemption for funeral, cremation, and burial services. The average cost of a burial in West Virginia is $7,032 while the average cost of cremation in the State is $2,257. The State cremation rate is close to 40 percent. According to the Center for Disease Control and Prevention (CDC), in calendar year 2021 there were 29,676 reported deaths in West Virginia. Passage of this bill would reduce General Revenue Fund collections by nearly $3.8 million in FY2024 and $9.2 million per year in subsequent fiscal years. Additional administrative costs incurred by the State Tax Department would be $1,000 in FY2023.



Memorandum


The stated purpose of this bill is to create a tax exemption for funeral, cremation, and burial services. W.Va. Code §30-6-3 provides definitions for “cremation” and “funeral”, but no definition for “burial”. The proposed exemption may constitute a change in sales taxation that is subject to the notice provisions of the Streamlined Sales and Use Tax Agreement. The bill does not provide an internal effective date.



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