FISCAL NOTE

Date Requested: June 18, 2019
Time Requested: 08:41 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
4208 Introduced HB171
CBD Subject: Education (K12), Taxation


FUND(S):

General Revenue Fund, municipalities

Sources of Revenue:

General Fund municipalities

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 provide a four-day sales holiday during which certain which certain items of clothes, school supplies, school instructional materials, laptop & tablet computers, and sports equipment are exempt from sales and use taxes.
    
    According to our interpretation, the passage of this bill purports to provide an exemption from sales and use tax for certain items purchased on the first Sunday of August or the previous Friday and Saturday or the following Monday. Exempt items include clothing priced $125 or less; school supplies priced at $50 or less; school instructional material priced $20 or less, and laptop and tablet computers, not purchased for use in a trade or business and priced $150 or less. Passage of the bill will result in loss of State sales tax revenue of approximately $3.9 million and a decrease of $250,000 to the municipalities for a total loss of $4.1 million beginning in FY2020 each fiscal year thereafter under the assumption that this change would be effective from passage.
    
    Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2020 and each fiscal year thereafter.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2019
Increase/Decrease
(use"-")
2020
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 5,000 5,000
Personal Services 0 0 5,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 5,000 0
2. Estimated Total Revenues 0 -4,100,000 -4,100,000


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


    According to our interpretation, the passage of this bill purports to provide an exemption from sales and use tax for certain items purchased on the first Sunday of August or the previous Friday and Saturday or the following Monday. Exempt items include clothing priced $125 or less; school supplies priced at $50 or less; school instructional material priced $20 or less, and laptop and tablet computers, not purchased for use in a trade or business and priced $150 or less. Passage of the bill will result in loss of State sales tax revenue of approximately $3.9 million and a decrease of $250,000 to the municipalities for a total loss of $4.1 million beginning in FY2020 each fiscal year thereafter under the assumption that this change would be effective from passage.
    
    Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2020 and each fiscal year thereafter.
    



Memorandum


    The stated purpose of this bill is to provide a four-day sales holiday during which certain which certain items of clothes, school supplies, school instructional materials, laptop & tablet computers, and sports equipment are exempt from sales and use taxes.
    
    The bill amends and reenacts W. Va. Code §11-15-9g. However, the bill as drafted does not delete any part of the current W. Va. Code §11-15-9g, which will result in overlapping and contradictory provisions.
    
    



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