FISCAL NOTE

Date Requested: January 18, 2018
Time Requested: 03:47 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2103 Introduced HB2350
CBD Subject: Alcoholic Liquors and Beers


FUND(S):

Local governments

Sources of Revenue:

Other Fund local governments

Legislation creates:

Decreases 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 give all taxes collected for sales of alcoholic beverages outside municipal limits to the counties only.
    
    Based on our interpretation, the proposed bill would make county governments the recipient of all local alcohol tax collections for sales outside municipal borders. Municipalities would still receive the portion of local alcohol taxes for sales within their borders. However, the proposed bill removes the provision that taxes collected from sales within 1 mile of corporate limits be given to the municipalities as well. This bill would affect local governments only and impose no effect on State revenues. In TY2017, the West Virginia Treasurer’ Office distributed a total of more than $9.6 million to county and municipal governments resulting from the sale of intoxicating liquors.
    
    The State Tax Department would incur $45,000 in additional costs in FY2019 and would save $10,000 in costs for each year thereafter as a result of reduced administrative complexity and ease of compliance burden on vendors.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2018
Increase/Decrease
(use"-")
2019
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 45,000 -10,000
Personal Services 0 25,000 -10,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 20,000 0
2. Estimated Total Revenues 0 0 0


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


    Based on our interpretation, the proposed bill would make county governments the recipient of all local alcohol tax collections for sales outside municipal borders. Municipalities would still receive the portion of local alcohol taxes for sales within their borders. However, the proposed bill removes the provision that taxes collected from sales within 1 mile of corporate limits be given to the municipalities as well. This bill would affect local governments only and impose no effect on State revenues. In TY2017, the West Virginia Treasurer’ Office distributed a total of more than $9.6 million to county and municipal governments resulting from the sale of intoxicating liquors.
    
    The State Tax Department would incur $45,000 in additional costs in FY2019 and would save $10,000 in costs for each year thereafter as a result of reduced administrative complexity and ease of compliance burden on vendors.
    



Memorandum


    The stated purpose of this bill is to give all taxes collected for sales of alcoholic beverages outside municipal limits to the counties only.
    
    The proposed bill has a title defect in that the title does not reflect the change that the tax would be imposed on the purchases of liquor from retail liquor licensees rather than from state stores as in current Law. This change further conflicts with language in W. Va. Code §60-3A-21, where a 5 percent tax on the purchases of liquor from retail licensees is already in effect. Further, sales of wine and liquor within a municipality’s borders are also governed by West Virginia Code §8-13-7; this Code section does not authorize the enactment of an ordinance imposing a tax on purchases of liquor from retail licensees.
    
    The stated purpose is to give (emphasis added) “…all taxes collected for the sales of alcoholic beverages outside municipal limits to the counties only.” This introduces confusion as the bill does not address other taxes, such as the Consumer Sales and Service Tax, that might also be collected on such sales. The proposed bill also contains some technical errors in the striking of certain language, such as deleting “state stores.”
    



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