FISCAL NOTE
Date Requested: February 18, 2016 Time Requested: 10:44 AM |
Agency: |
Tax Department, State |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2840 |
Comm. Sub. |
HB 2852 |
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CBD Subject: |
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FUND(S):
General Revenue Fund, State Road Fund, Veterans' Facilities Fund
Sources of Revenue:
General Fund,Special 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 legalize and regulate the selling of fireworks; to allocate sales tax proceeds to special funds; and to modify criminal penalties.
Based on our interpretation, the proposed bill creates four sources of revenue: a public fireworks display permit fee; consumer fireworks certificate fee collected from retailers; sales taxes on sales of fireworks; and a fireworks safety fee. The public fireworks display permit fee would raise an estimated $12,000 per year in revenue for the first full year of implementation. The consumer fireworks certificate fee would raise an estimated $400,000 per year for the first full year of implementation. Revenue generated from State sales tax collections on the sale of fireworks is estimated to be $900,000 for the first full year of implementation. The fireworks safety fee is estimated to generate $1.8 million in revenues for the first full year of implementation. Collectively, total revenue is estimated to be $3.1 million for the first full year of implementation.
The proposed bill would distribute roughly $900,000 into the General Revenue Fund each year. With respect to the fireworks safety fee, each of the following funds would receive one-third of total annual collections (approximately $600,000): the West Virginia Veterans’ Facilities Support Fund, the Fire Protection Fund, and the State Road Fund. The State Tax Commissioner may withhold up to 1 percent of the fireworks safety fees, roughly $18,000 per year, for administrative costs related to the administration of this tax. The remaining balance of roughly $412,000, made up of retailer certification and public fireworks display fee collections, will be distributed to the Fire Marshal Fees Fund.
Given that there is no internal effective date for the tax changes proposed by this bill and considering the seasonality of fireworks and similar commodities, partial-year revenues if implemented at a time other than July 1 may vary.
Administrative costs to the State Tax Department will be $52,000 for the remainder of FY 2016, $89,000 for FY 2017 and $75,000 thereafter.
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 |
52,000 |
89,000 |
75,000 |
Personal Services |
0 |
75,000 |
75,000 |
Current Expenses |
450 |
0 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
14,000 |
0 |
Other |
51,550 |
0 |
0 |
2. Estimated Total Revenues |
0 |
3,100,000 |
3,100,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill creates four sources of revenue: a public fireworks display permit fee; consumer fireworks certificate fee collected from retailers; sales taxes on sales of fireworks; and a fireworks safety fee. The public fireworks display permit fee would raise an estimated $12,000 per year in revenue for the first full year of implementation. The consumer fireworks certificate fee would raise an estimated $400,000 per year for the first full year of implementation. Revenue generated from State sales tax collections on the sale of fireworks is estimated to be $900,000 for the first full year of implementation. The fireworks safety fee is estimated to generate $1.8 million in revenues for the first full year of implementation. Collectively, total revenue is estimated to be $3.1 million for the first full year of implementation.
The proposed bill would distribute roughly $900,000 into the General Revenue Fund each year. With respect to the fireworks safety fee, each of the following funds would receive one-third of total annual collections (approximately $600,000): the West Virginia Veterans’ Facilities Support Fund, the Fire Protection Fund, and the State Road Fund. The State Tax Commissioner may withhold up to 1 percent of the fireworks safety fees, roughly $18,000 per year, for administrative costs related to the administration of this tax. The remaining balance of roughly $412,000, made up of retailer certification and public fireworks display fee collections, will be distributed to the Fire Marshal Fees Fund.
Given that there is no internal effective date for the tax changes proposed by this bill and considering the seasonality of fireworks and similar commodities, partial-year revenues if implemented at a time other than July 1 may vary.
Administrative costs to the State Tax Department will be $52,000 for the remainder of FY 2016, $89,000 for FY 2017 and $75,000 thereafter.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov