FISCAL NOTE

Date Requested: January 10, 2020
Time Requested: 10:57 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1604 Introduced SB243
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 exempt sales of tangible personal property to safely store firearms, including, but not limited to, safes and trigger locks from the consumer sales tax. According to our interpretation, the proposed bill would create an exemption from consumer sales and use tax for all sales of tangible personal property used to safely store firearms. The exemption would apply to sales made on or after the effective date of the amendment which is July 1, 2020. Based on the assumption that the exemption covers safes and trigger locks only, the passage of the proposed legislation would create a loss in General Revenue collections of $45,000 in FY2021 and a loss of $50,000 in subsequent fiscal years. Additional administrative cost incurred by the State Tax Department are expected to be $5,000 in FY2020.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 5,000 0 0
Personal Services 5,000 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 45,000 50,000


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


According to our interpretation, the proposed bill would create an exemption from consumer sales and use tax for all sales of tangible personal property used to safely store firearms. The exemption would apply to sales made on or after the effective date of the amendment which is July 1, 2020. Based on the assumption that the exemption covers safes and trigger locks only, the passage of the proposed legislation would create of loss in General Revenue collection of $45,000 in FY2021 and a loss of $50,000 in subsequent fiscal years. Additional administrative cost incurred by the State Tax Department are expected to be $5,000 in FY2020.



Memorandum


The stated purpose of this bill is to exempt sales of tangible personal property to safely store firearms, including, but not limited to, safes and trigger locks from the consumer sales tax. Although the language of the proposed bill specifically includes “safes and trigger locks,” the bill does not otherwise define what constitutes “tangible personal property to store firearms.” The exemption could potentially apply to purchases of tangible personal property of any design or utility, as long as the purchaser claimed that its intended use was for gun storage.



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