FISCAL NOTE
Date Requested: February 17, 2016
Time Requested: 10:16 AM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2694 |
Introduced |
SB610 |
|
|---|
| CBD Subject: |
Motor Vehicles, Roads and Transportation, Taxation |
|---|
|
FUND(S):
State Road Fund, General Revenue Fund
Sources of Revenue:
General Fund,Other Fund State Road 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 raise money for the State Road Fund, road construction and maintenance and construction employment.
The provisions of this bill would increase a number of fees administered by the Division of Motor Vehicles (DMV) and increase a number of taxes administered by the State Tax Department. This fiscal note only relates to provisions administered by the State Tax Department. A separate fiscal note on license fee increases should be prepared by DMV.
According to our interpretation, the provisions of this bill would make the following changes:
• Increase the diesel fuel excise tax from $.205 to $.255 beginning July 1, 2016. Additional revenue from this proposed change would be $13.3 million in FY2017 and $15.7 million in each year thereafter.
• Increases the General State Sales and Service rate from 6% to 6.5% effective January 1, 2017, with the increased revenue assumed to be dedicated to the State Road Fund. Additional revenue from this proposed change would be $42.0 million in FY2017 and $100.0 million in each year thereafter.
• Transfers revenue from the sales tax on motor vehicle repairs, parts and services. This section will become effective 90 days from passage, and will transfer approximately $62.0 million in FY2017 and $65.0 million in each year thereafter.
The total net gain to the State Road Fund from the proposed tax changes administered by the Tax Department would be roughly $55.3 million in FY2017 and more than $116.0 million when fully implemented. State General Revenue Fund collections would decrease by at least $62.0 million in FY2017 and approximately $65.0 million in each year thereafter due to the additional sales tax revenue transfer requirement.
Administrative costs to the Tax Department will be $46,500 in the current fiscal year and $10,000 in each year 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 |
0 |
0 |
0 |
| Personal Services |
0 |
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 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The provisions of this bill would increase a number of fees administered by the Division of Motor Vehicles (DMV) and increase a number of taxes administered by the State Tax Department. This fiscal note only relates to provisions administered by the State Tax Department. A separate fiscal note on license fee increases should be prepared by DMV.
According to our interpretation, the provisions of this bill would make the following changes:
• Increase the diesel fuel excise tax from $.205 to $.255 beginning July 1, 2016. Additional revenue from this proposed change would be $13.3 million in FY2017 and $15.7 million in each year thereafter.
• Increases the General State Sales and Service rate from 6% to 6.5% effective January 1, 2017, with the increased revenue assumed to be dedicated to the State Road Fund. Additional revenue from this proposed change would be $42.0 million in FY2017 and $100.0 million in each year thereafter.
• Transfers revenue from the sales tax on motor vehicle repairs, parts and services. This section will become effective 90 days from passage, and will transfer approximately $62.0 million in FY2017 and $65.0 million in each year thereafter.
The total net gain to the State Road Fund from the proposed tax changes administered by the Tax Department would be roughly $55.3 million in FY2017 and more than $116.0 million when fully implemented. State General Revenue Fund collections would decrease by at least $62.0 million in FY2017 and approximately $65.0 million in each year thereafter due to the additional sales tax revenue transfer requirement.
Administrative costs to the Tax Department will be $46,500 in the current fiscal year and $10,000 in each year thereafter.
Memorandum
The stated purpose of this bill is to raise money for the State Road Fund, road construction and maintenance and construction employment.
The bill fails to raise the Use Tax in Article 15A, Chapter 11.
The bill mistakenly dedicates 0.5 cents rather than .05 cents to the State Road Fund.
The bill does not reference the Tax Commissioner when discussing the sales tax on motor vehicle repairs, making administrative duties unclear.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov