FISCAL NOTE

Date Requested: February 05, 2016
Time Requested: 02:21 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
1351 Introduced HB4419 x
CBD Subject: Const. Amendments, Military and Veterans, Tax


FUND(S):

General Revenue Fund, local governments

Sources of Revenue:

General Fund,Other Fund local property tax

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The stated purpose of this bill is to exempt the primary residence of any veteran from real property tax.
    
    Under the provisions of this bill, the primary residence of any veteran would be exempt from Property Tax. This exemption would result in a revenue loss of roughly $40.0 million annually. The estimated revenue loss would be roughly $11.9 million to the State General Revenue Fund, $14.7 million to local county school boards, $10.7 million to county commissions and $2.7 million to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the FY2016 Classified Assessed Valuations Taxes Levied publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula.
    
    There would be some administrative costs to local governments in determining qualifying veterans.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 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 0 0


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


    Under the provisions of this bill, the primary residence of any veteran would be exempt from Property Tax. This exemption would result in a revenue loss of roughly $40.0 million annually. The estimated revenue loss would be roughly $11.9 million to the State General Revenue Fund, $14.7 million to local county school boards, $10.7 million to county commissions and $2.7 million to municipalities. The distribution of estimated cost is based on information from taxes levied as reported in the FY2016 Classified Assessed Valuations Taxes Levied publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula. We estimate that there would be 167,000 veterans who would qualify for this exemption.
    
    There would be some administrative costs to local governments in determining qualifying veterans.
    



Memorandum


    The stated purpose of this bill is to exempt the primary residence of any veteran from real property tax.
    
    Article X, Section 1 of the W. Va. Constitution requires taxation to be equal and uniform throughout the State, property is taxed in proportion to its value, and no one species of property which is taxed may be taxed higher than any other species of property of equal value.
    
    In addition, the only exemptions from ad valorem property taxation authorized by the Constitution are for “property used for educational, literary, scientific, religious or charitable purposes, all cemeteries, public property, the personal property, including livestock, employed exclusively in agriculture … and the products of agriculture … while owned by the producers … [and] household goods to the value of two hundred dollars.”
    
    The term “veteran” is not defined.
    



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