FISCAL NOTE
Date Requested: January 10, 2020
Time Requested: 03:47 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1082 |
Introduced |
SB77 |
|
|---|
| CBD Subject: |
Professions and Occupations |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases 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 establish a tax credit for physicians who are new graduates and locate in West Virginia to practice medicine for at least six years.
Based upon our interpretation, the bill would create a tax credit of up to 100 percent of the taxpayer’s taxable income for up to three consecutive years per eligible physician. West Virginia taxes less than 6.5 percent of an individual’s taxable income. Therefore, the proposed tax credit would eliminate 100 percent of any Personal Income Tax Liability related to all income reported on an annual tax return for any Personal Income Tax Liability related to all income reported an annual income tax return for any qualified physician, and spouse if applicable, for those tax years with more than 93.5 percent of the calculated credit unused. As the bill provides to be available beginning July 1, 2020, Tax Year 2021 would be the first year the credit would be available. If passed, the bill would result in revenue loss of at least $3.0 in FY2022. It should be noted, that given eligible physicians can claim the credit up to three years, the revenue loss could increase to more than $9.0 million per year.
Additional administrative costs would be $25,000 in FY2022 and $15,000 in subsequent fiscal years, thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
15,000 |
| Personal Services |
0 |
0 |
15,000 |
| 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 |
-9,000,000 |
Explanation of above estimates (including long-range effect):
Based upon our interpretation, the bill would create a tax credit of up to 100 percent of the taxpayer’s taxable income for up to three consecutive years per eligible physician. West Virginia taxes less than 6.5 percent of an individual’s taxable income. Therefore, the proposed tax credit would eliminate 100 percent of any Personal Income Tax Liability related to all income reported on an annual tax return for any Personal Income Tax Liability related to all income reported an annual income tax return for any qualified physician, and spouse if applicable, for those tax years with more than 93.5 percent of the calculated credit unused. As the bill provides to be available beginning July 1, 2020, Tax Year 2021 would be the first year the credit would be available. If passed, the bill would result in revenue loss of at least $3.0 in FY2022. It should be noted, that given eligible physicians can claim the credit up to three years, the revenue loss could increase to more than $9.0 million per year.
Additional administrative costs would be $25,000 in FY2022 and $15,000 in subsequent fiscal years, thereafter.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov