West Virginia fireworks sales' tax revenues below estimates
Tax revenues from the sale of fireworks in West Virginia are far below projected estimates, according to a state study.
A state Tax Department report to the Legislature found fireworks sales last year generated $710,000 from a 12 percent safety fee and $355,000 in sales tax collections,
. The total of slightly more than $1 million in taxes generated was far less than annual revenue estimates of $2.8 million when the bill was passed in 2016.
The safety fee is one of many factors that have caused sluggish fireworks sales. Neighboring Ohio and Kentucky charge sales taxes on fireworks but no safety fee, the report found.
The report also noted that unlike West Virginia's temporary sales setups, Ohio and Kentucky have "an established customer base and business locations."
Three-fourths of the safety fee goes toward veterans' nursing homes and the rest goes to volunteer fire departments. The fee was a key selling point for the legislation.
The report said "recent trends indicate that proceeds from the fee are unlikely to rise in the near-term."
Prior to the law's passage, only novelty fireworks such as sparklers were legal in West Virginia.
The report did not mention that several municipalities passed ordinances restricting fireworks use in the summer and fall of 2016 after widespread complaints about Independence Day fireworks. For instance, prior to the 2016 law, Morgantown had an ordinance on the books prohibiting the use of fireworks within city limits. Other cities such as Charleston limit fireworks use during certain hours on particular holidays.