FISCAL NOTE
Date Requested: February 02, 2016
Time Requested: 01:23 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2029 |
Introduced |
HB4357 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
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 allow a taxpayer a personal income tax credit for each dependent that participated in home educational instruction for the most recent academic year.
Based on our interpretation, the proposed bill would result in an annual loss to the General Revenue Fund of approximately $960,000 per year, assuming full participation, beginning in FY2018 when eligible Personal Income Tax returns would be filed. As the credit is allowable for tax years beginning on or after January 1, 2017, there would be no fiscal effect in FY2017.
There would be no additional administrative costs incurred by the State Tax Department for the remainder of FY2016 and FY2017. Additional administrative costs incurred in FY2018 include one-time costs of $8,990 and recurring costs of $10,000 for FY2018 and each year thereafter.
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 |
10,000 |
| Personal Services |
0 |
0 |
10,000 |
| 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 |
-960,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill would result in an annual loss to the General Revenue Fund of approximately $960,000 per year, assuming full participation, beginning in FY2018 when eligible Personal Income Tax returns would be filed. As the credit is allowable for tax years beginning on or after January 1, 2017, there would be no fiscal effect in FY2017.
There would be no additional administrative costs incurred by the State Tax Department for the remainder of FY2016 and FY2017. Additional administrative costs incurred in FY2018 include one-time costs of $8,990 and recurring costs of $10,000 for FY2018 and each year thereafter.
Memorandum
The stated purpose of this bill is to allow a taxpayer a personal income tax credit for each dependent that participated in home educational instruction for the most recent academic year.
It would be helpful if the record-keeping requirements and methods of claiming credit were included in the proposed legislation.
It is not clear if there is a maximum cumulative credit, and whether the credit can exceed the amount of tax otherwise due.
The taxpayer being eligible based upon the last preceding academic year is awkward, since academic years do not coincide with personal income tax years.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov