FISCAL NOTE

Date Requested: March 14, 2017
Time Requested: 01:20 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
3198 Introduced HB3035
CBD Subject: Crime


FUND(S):

Unspecified

Sources of Revenue:

Other Fund Unspecified

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 the manufacture, sale and possession of marijuana and establish a regulatory program for growing, selling and testing of marijuana sold in West Virginia. According to our interpretation, the proposed bill would legalize the manufacture, sale, and possession of marijuana and subject it to tax. Beyond the statement that the marijuana would be “taxed in a manner similar to alcohol” (West Virginia Code §11-16A-1), the proposed bill is silent as to what the tax rate would be, how the tax would be applied, and which fund resulting collections would benefit. Without further guidance, an estimate of potential revenues cannot be determined. Additional costs incurred by the State Tax Department cannot be determined without further information for the scope of the proposed tax.  



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
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):


According to our interpretation, the proposed bill would legalize the manufacture, sale, and possession of marijuana and subject it to tax. Beyond the statement that the marijuana would be “taxed in a manner similar to alcohol” (West Virginia Code §11-16A-1), the proposed bill is silent as to what the tax rate would be, how the tax would be applied, and which fund resulting collections would benefit. Without further guidance, an estimate of potential revenues cannot be determined. Additional costs incurred by the State Tax Department cannot be determined without further information for the scope of the proposed tax.



Memorandum


The stated purpose of this bill is to legalize the manufacture, sale and possession of marijuana and establish a regulatory program for growing, selling and testing of marijuana sold in West Virginia. As written, the proposed bill would be difficult to administer. Some of the requirements placed on the Tax Department in West Virginia Code §11-16A-15 et seq. are outside the Department’s expertise. Further, the bill does not provide explicit authority to levy taxes and is silent as to how the tax should be structured. The requirement that applicants must be able to collect and pay taxes is unique and vague and would likely result in litigation. The terms “normal adult” and “commission” are used in Sections 13 and 16, respectively, but are not defined. Further, unlike other sections that describe prohibited behavior, Section 12 does not specify a penalty.



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