Committee Meeting Information

December 9, 2008

Capitol Building, Room 302

Cheyenne, Wyoming

 

Committee Members Present

Senator Jim Anderson, Co-Chairman

Representative Rodney “Pete” Anderson, Co-Chairman

Senator Cale Case

Senator Kit Jennings

Senator Jayne Mockler

Senator Tony Ross

Representative Ken Esquibel

Representative Mary Gilmore

Representative Tom Lubnau

Representative Mike Madden

Representative David Miller

Representative Mark Semlek

Representative Tim Stubson

 

Committee Members Absent

Representative Dave Zwonitzer

 

Legislative Service Office Staff

Mark Quiner, Assistant Director, Dean Temte, Legislative Analyst

Matthew Sackett, Research Analyst, Josh Anderson, Staff Attorney

 

 

Others Present at Meeting

Please refer to Appendix 1 to review the Committee Sign-in Sheet
for a list of other individuals who attended the meeting.

Executive Summary

The Committee met for one day in Cheyenne.  The Committee voted to sponsor legislation on a homestead exemption for property taxes, taxation of moist snuff tobacco based on weight, permitting vendors to keep a portion of sales tax collected and extending the manufacturing equipment exemption to agents of manufacturers.  The Committee also heard testimony on digital products and ethanol and received required reports from the Department of Revenue.

 

Call To Order

Co-chair Representative Anderson called the meeting to order at 8:30 am.  The following sections summarize the Committee proceedings by topic.  Please refer to Appendix 2 to review the Committee Meeting Agenda.

 

Property Tax Issues

Representative Anderson noted that there is a historical homestead exemption which has been in statute since the 1970’s, but that it has not been funded since the 1980’s.  There was a handout of a bill on the homestead exemption (see Appendix 3 for a copy of the bill).

 

Mr. Ed Schmidt, Director of the Department of Revenue noted that the bill would exempt the first $5,000 of value for a person who has lived in Wyoming for three years, who is the owner and occupant of the residence with a cap on the value of the home of $237,000 or less which he noted was the maximum loan amount for a WCDA loan.  Mr. Schmidt provided a handout to the Committee of a sample property tax assessment notice (see Appendix 4 for a copy of the handout).  Mr. Schmidt noted that the exemption would cost approximately $38 million which is roughly what was proposed in the Governor's budget.  Mr. Schmidt provided handouts to the Committee on the estimates of the costs (see Appendix 5 for a copy of the handouts).  Mr. Marv Applequist of the Department of Revenue noted that the estimate does not include the three year residency requirement so there was a possibility that some homes included in the estimate would not qualify.

 

In response to a question, Mr. Schmidt noted that assessments are starting to roll back across the state, but in some places the values are still high, especially in areas with minerals and scenic areas.  In response to a question, Mr. Applequist stated that the exemption could be on the assessment notice this year and would apply to next year's tax assessment.

 

In response to a question, Ms. Kim Lovett of Laramie County noted that approximately 60% of the homes in the county are mortgaged.

 

After additional discussion, Co-chair Senator Anderson moved the bill and it was seconded.

 

Co-chair Representative Anderson moved and distributed a proposed amendment to the Committee.  See Appendix 3 for a copy of the amendment.

 

Ms. Brenda Arnold of Laramie County noted that if a person were to qualify for the veterans exemption and the homestead exemption and signed both they would try to ensure that the person would get the one that would help the most, she also noted that the Committee could consider making the veterans exemption apply to motor vehicles in such cases.

 

The amendment was seconded and passed by voice vote.

 

Senator Anderson moved that on page 5-line 17 – delete "assessor" insert "treasurer".  The motion was seconded and passed by voice vote.

 

Senator Jennings moved that on page 7 line 17 strike “primarily formed for the purpose of farming or ranching” and make the same change in subparagraph (G)(I)(4).  The motion was seconded.  After discussion the amendment failed.

 

Representative Miller moved to delete page 7-line 16 through page 8-line 2.  The motion failed.

 

Senator Anderson moved that the bill be made effective immediately and made to apply to taxes beginning Jan 1, 2009.  The motion was seconded and passed by voice vote.

 

The bill (09LSO-0145.W1) passed the Committee as amended with a roll call vote of 9 ayes, 4 noes and 1 excused.  (See Appendix 3 for a copy of the vote form).

 

Excise Tax Issues

Tobacco Product Tax

The Legislative Service Office presented a bill the Committee as requested by the Committee on tobacco excise tax to tax moist snuff based on weight (09LSO-0142.W1).  See Appendix 6 for a copy of the bill.  The bill was moved by Senator Jennings and seconded.

 

The Committee received a proposed amendment to the bill to place a floor on the tax for products that weigh less than once ounce.  (see Appendix 6 for a copy of the amendment).  Senator Ross moved the proposed amendment .  The motion was seconded and passed by voice vote.

 

Ms. Jan Drury of the American Heart Association noted that it was a tax stabilization, not a tax increase and that she would like to see a tax to prevent use.

 

Ms. Loretta Wolf of the American Cancer Society noted that she would like to see a tax to help prevent cancer and suggested the proposed tax be raised to $1.20 per ounce.

 

Mr. Dan Sullivan of US Tobacco noted that although the bill lacks an inflationary value the legislature can raise the amount each year and suggested that the decision to raise the amount of the tax for inflation is a legislative function.

 

The bill (09LSO-0142.W1) passed the Committee as amended with a roll call vote of 12 ayes, 1 no and 1 excused.  (See Appendix 6 for a copy of the vote form).

 

The Legislative Service Office presented a bill to the Committee as requested by the Committee on the definition of nicotine products for the purposes of taxation (09LSO-0143.W1).  See Appendix 7 for a copy of the bill.

 

Mr. Tom Jones of the Wyoming Wholesalers and Coin Operators Association noted that wholesalers could have products that the wholesaler would not know if it had nicotine in it.  He noted that the definition could contain lots of unintended products.

 

The bill (09LSO-0143.W1) failed to pass the Committee with a roll call vote of 4 ayes, 9 noes and 1 excused.  (See Appendix 7 for a copy of the vote form).

 

Vendor Collection Fees

The Legislative Service Office presented a bill to the Committee as requested by the Committee on vendor collection fees which would allow vendors to retain a portion of sales tax collected (09LSO-0144.W1).  See appendix 8 for a copy of the bill.  Mr. Dan Noble of the Department of Revenue noted that the bill would compensate vendors for 1% of tax collected up to a cap of $10,000 and noted that the bill was nearly identical to Arizona’s statute.  Mr. Noble noted that roughly half of the states offer some kind of vendor compensation to meet the cost of collection.  Mr. Noble noted that Wyoming has a relatively simple tax structure and that other states have more taxing districts.

 

In response to a question, Mr. Noble stated that without the cap the fiscal note would be approximately nine million dollars but that the $10,000 cap would have an effect on that number.

 

Representative Miller  moved that on page 2-line 8 delete “claim” insert “deduct”.  The motion was seconded and passed by voice vote.

 

The bill (09LSO-0144.W1) passed the Committee as amended with a roll call vote of 11 ayes, 2 noes and 1 excused.  (See Appendix 8 for a copy of the vote form).

 

Manufacturing Exemption

The Legislative Service Office presented a bill to the Committee as requested by the Committee on a manufacturing excise tax exemption (09LSO-0335.W2).  See Appendix 9 for a copy of the bill.  Mr. Walter Eggers of Holland and Hart noted that under current law if a manufacturer purchases machinery under the statute it is exempt, but if the manufacturer’s agent purchases the machinery it is not exempt.  He stated that this was more an administrative change and would be more efficient.

 

After additional discussion, Senator Jennings moved the bill.  The motion was seconded and 09LSO-0335.W2 passed the Committee with a roll call vote of 12 ayes, 1 no and 1 excused.  (See Appendix 9 for a copy of the vote form).

 

Other Excise Tax Issues

Mr. Noble provided a handout related to the streamlined sales tax (see Appendix 10 for a copy of the handout).  The handout provides a proposed definition of specified digital products.  Mr. Noble noted that with digital books none of the commerce is being taxed and that it needs to be clear if digital books are taxable.

 

Mr. Dave Picard for Echostar, Verizon and ATT noted that one major concern is that the consumer does not own the movie, it is not tangible and in many cases it disappears after 24 hours.  He noted that the issue is complex and there are many concerns about any legislation having unintended consequences.

 

Mr. Noble noted that there is some need to provide some certainty for the Department in how to deal with these types of issues and that courts have come down on both sides.  He noted that there is a need to know the intent of the legislature.

 

Mr. Eggers on behalf of Bresnan noted that an interim study on the issue would be appropriate.

 

Senator Anderson requested that the industry sit down with staff, the Department of Revenue and other interested parties to potentially work on a draft bill for the Committee to consider.

 

Fuel Tax

The Legislative Service Office presented a bill to the Committee as requested by the Committee on the non-highway use of fuel  (09LSO-0399.W1).  See Appendix 11 for a copy of the bill.  Mr. Quiner noted that the bill would amend the exemption on fuel for agricultural purposes to 100 gallons of fuel and that it may not be used on a public road.

 

Mr. Scott Zimmerman of the Rocky Mountain Farmers Union noted that this change would apply to farmers who are on the road going from one pasture to another and questioned whether that change would be appropriate.

 

Representative Semlek moved the bill.

 

Representative Anderson moved that on page 2 delete lines 1 through 3 and “purposes.” on line four.  The amendment was seconded and passed by voice vote.

 

After additional discussion, the bill (09LSO-0399.W1) failed to pass the Committee with a roll call vote of 12 noes, 2 excused.  (See Appendix 11 for a copy of the vote form.)

 

Mr. Tom Jones addressed the Committee concerning ethanol tax credits and noted that there are only 4,000,000 credits available.  Mr. Zimmerman noted that cellulosic based ethanol is coming and that beetle kill trees could potentially be used for ethanol.

 

Mr. Craig Grenvick of the Department of Revenue addressed the Committee concerning draft bill 09LSO-0336.W1 entitled "Mineral taxes-audit and refund" and provided an additional handout to the Committee related to the bill.  (See Appendix 12 for a copy of the bill and handout.)  Mr. Grenvick noted that the statute of limitations on mineral taxes was changed to three years and the Department has 3 ½ years to audit but that the taxpayer can ask for a refund for 5 years and noted that if a request for a refund comes in the time in between the Department would not have authority to audit.

 

Senator Ross noted that the bill was not on the agenda and that it was not on the website and because of that it was unclear whether all of the interested parties would be there for public comment.

 

Senator Anderson stated that the bill would not be sponsored by the Committee.

 

Coal Valuation

Senator Anderson stated that coal valuation was off the agenda.

 

Mr. Marion Loomis of the Wyoming Mining Association noted that the industry was trying to get numbers together but that they could not find agreement between industry, the department and the governor.  He requested the Committee to keep the topic available for the interim next year and stated that industry would work with department to identify concepts.

 

The Department provided four reports to the Committee.  (See Appendix 13 for a copy of the reports.)  The Reports are on incentives and tax exemptions related to: coal gasification and liquefication; railroad rolling stock; manufacturing machinery; and oil, gas uranium and coal.

 

 

Meeting Adjournment

There being no further business, Co-Chairman Representative Anderson adjourned the meeting at 3:30 pm.

 

Respectfully submitted,

 

 

 

Senator Anderson, Co-Chairman                                             Representative Anderson, Co-Chairman

 

 

 

 

 

 

 

 

 

Appendix		Appendix Topic		Appendix Description		Appendix Provider
1		Attendance Sheet		Attendance Sheet		Legislative Service Office
2		Agenda		Agenda		Legislative Service Office
3		Homestead exemption		09LSO-0145.W1		Legislative Service Office
4		Homestead exemption		Assessment form		Department of Revenue
5		Homestead exemption		Estimates		Department of Revenue
6		Tobacco tax		09LSO-0142.W1		Legislative Service Office
7		Tobacco Tax		09LSO-0143.W1		Legislative Service Office
8		Vendor compensation		09LSO-0144.W1		Legislative Service Office
9		Manufacturing exemption		09LSO-0335.W2		Legislative Service Office
10		Digital products		Proposed definition of digital products		Department of Revenue
11		Gasoline tax		09LSO-0399.W1		Legislative Service Office
12		Mineral taxes		09LSO-0336.W1 and handout		Legislative Service Office/Department of Revenue
13		Reports		Required reports		Department of Revenue