FISCAL NOTE
Date Requested: January 29, 2016
Time Requested: 03:17 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1990 |
Introduced |
SB335 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to eliminate the severance tax on timber.
The proposed Executive Budget for FY2017 includes the elimination of the 2.78 percent Workers’ Compensation Severance Tax by not later than June 30, 2016, and the reinstatement of the Timber Severance Tax on July 1, 2016 at a rate of 2.78 percent with proceeds going to a special revenue fund for the benefit of the Division of Forestry. This fiscal note reflects changes relative to the proposed Executive Budget. In comparison to the Executive Budget for Fiscal Year 2017, revenue losses to the Division of Forestry would be approximately $2.4 million at the higher rate of 2.78 percent of the gross value of timber produced.
Administrative costs to the State Tax Department would be $3,990 for the first full year of implementation. No additional costs are expected in subsequent years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
3,990 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
3,990 |
0 |
| 2. Estimated Total Revenues |
0 |
-2,400,000 |
-2,400,000 |
Explanation of above estimates (including long-range effect):
The proposed Executive Budget for FY2017 includes the elimination of the 2.78 percent Workers’ Compensation Severance Tax by not later than June 30, 2016, and the reinstatement of the Timber Severance Tax on July 1, 2016 at a rate of 2.78 percent with proceeds going to a special revenue fund for the benefit of the Division of Forestry. This fiscal note reflects changes relative to the proposed Executive Budget. In comparison to the Executive Budget for Fiscal Year 2017, revenue losses to the Division of Forestry would be approximately $2.4 million at the higher rate of 2.78 percent of the gross value of timber produced.
Administrative costs to the State Tax Department would be $3,990 for the first full year of implementation. No additional costs are expected in subsequent years.
Memorandum
The stated purpose of this bill is to eliminate the severance tax on timber.
This bill eliminates the (principal) severance tax on timber imposed by West Virginia Code §11-13A-3b. While collection of this tax was discontinued in 2010 in lieu of an additional severance tax on timber pursuant to §11-13V-4 (Workers’ Compensation Debt Reduction Act), it is set to resume when the additional tax expires pursuant to §11-13V-4(g).
It is important to note that this bill may be affected by other potential bills, if any, affecting the severance tax on timber.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov