FISCAL NOTE

Date Requested: February 07, 2020
Time Requested: 10:53 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
3058 Introduced HB4751
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 provide a tax credit for dues paid to trade associations. According to our interpretation, passage of the bill would have the General Revenue Fund pay up to 100 percent of membership dues to trade associations via a 100 percent tax credit of up to a maximum of $10,000 per membership against either State Personal Income Tax or Corporation Net Income Tax. A data search revealed roughly 213 trade associations in West Virginia with memberships ranging from a few individuals and businesses to over a thousand. A person or corporation could belong to multiple trade associations. The fee to belong to one of these trade organizations can range from $250 to over $10,000. The revenue loss cannot readily be determined due to lack of information on the number of taxpayers who would qualify for the credit and the amount of fees they would pay. However, the revenue loss associated with this proposed credit would be very significant. Additional administrative costs to the Tax Department would be approximately $100,000 in FY2022 and $80,000 per year in the subsequent years.



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 80,000
Personal Services 0 0 80,000
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 0


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


According to our interpretation, passage of the bill would have the General Revenue Fund pay up to 100 percent of membership dues to trade associations via a 100 percent tax credit of up to a maximum of $10,000 per membership against either State Personal Income Tax or Corporation Net Income Tax. A data search revealed roughly 213 trade associations in West Virginia with memberships ranging from a few individuals and businesses to over a thousand. A person or corporation could belong to multiple trade associations. The fee to belong to one of these trade organizations can range from $250 to over $10,000. The revenue loss cannot readily be determined due to lack of information on the number of taxpayers who would qualify for the credit and the amount of fees they would pay. However, the revenue loss associated with this proposed credit would be very significant. Additional administrative costs to the Tax Department would be approximately $100,000 in FY2022 and $80,000 per year in the subsequent years.



Memorandum






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