FISCAL NOTE
Date Requested: January 12, 2024
Time Requested: 01:58 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1763 |
Introduced |
SB258 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
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 increase the tax credit for employers providing childcare for employees.
According to our interpretation, this bill would increase the credits for capital investment in a childcare facility and operating costs of a childcare facility from 50 percent to 100 percent. The current tax credits related to capital investments and operating costs are at 50 percent. This bill simply doubles the credit amount for both credits currently in statute. Increasing the tax credits to 100 percent effectively transfers the full cost of qualified activity to the State.
Passage of this bill will likely yield a reduction in the General Revenue Fund of some significance beginning in FY2025 largely due to the expansion of the current tax credits related to capital investment and operating costs of a childcare facility. The current tax credit only became effective as of July 1, 2022. Therefore, no significant claims were anticipated before the filing of tax year 2023 returns sometime in 2024. As structured, the tax credits are anticipated to be claimed by certain large employers, particularly non-profit corporations.
Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2025 and $5,000 per year in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
10,000 |
5,000 |
| Personal Services |
0 |
0 |
5,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, this bill would increase the credits for capital investment in a childcare facility and operating costs of a childcare facility from 50 percent to 100 percent. The current tax credits related to capital investments and operating costs are at 50 percent. This bill simply doubles the credit amount for both credits currently in statute. Increasing the tax credits to 100 percent effectively transfers the full cost of qualified activity to the State.
Passage of this bill will likely yield a reduction in the General Revenue Fund of some significance beginning in FY2025 largely due to the expansion of the current tax credits related to capital investment and operating costs of a childcare facility. The current tax credit only became effective as of July 1, 2022. Therefore, no significant claims were anticipated before the filing of tax year 2023 returns sometime in 2024. As structured, the tax credits are anticipated to be claimed by certain large employers, particularly non-profit corporations.
Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2025 and $5,000 per year in subsequent fiscal years.
Memorandum
The stated purpose of the bill is to increase the tax credit for employers providing childcare for employees.
This bill has no internal effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov