FISCAL NOTE
Date Requested: February 11, 2021 Time Requested: 02:02 PM |
Agency: |
Tax & Revenue Department, WV State |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2517 |
Introduced |
SB241 |
|
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 provide new graduates of an in-state or out-of-state higher educational institution, community or technical college, or trade school, a $1,000 tax credit on the income tax of the graduate for five taxable years; providing rule-making authority to the Tax Commissioner; and removing expired language from this section.
The proposed bill provides a tax credit to college graduates of up to $1,000 against their Personal Income Tax. This credit may be claimed for five taxable years, including the graduation year. Absent an effective date in the bill, this credit would be available for tax years beginning on or after January 1, 2022. The revenue loss from this proposed bill would be $6.4 million in FY2023 and would increase each year to $31.8 million for the fifth tax year.
Additional administrative costs to the State Tax Department would be $56,000 in FY 2023 and $40,000 in subsequent years.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2021 Increase/Decrease (use"-") |
2022 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
0 |
0 |
40,000 |
Personal Services |
0 |
0 |
40,000 |
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 |
-31,800,000 |
Explanation of above estimates (including long-range effect):
The proposed bill provides a tax credit to college graduates of up to $1,000 against their Personal Income Tax. This credit may be claimed for five taxable years, including the graduation year. Absent an effective date in the bill, this credit would be available for tax years beginning on or after January 1, 2022. The revenue loss from this proposed bill would be $6.4 million in FY2023 and would increase each year to $31.8 million for the fifth tax year.
Additional administrative costs to the State Tax Department would be $56,000 in FY 2023 and $40,000 in subsequent years.
Memorandum
The stated purpose of this bill is to provide new graduates of an in-state or out-of-state higher educational institution, community or technical college, or trade school, a $1,000 tax credit on the income tax of the graduate for five taxable years; providing rule-making authority to the Tax Commissioner; and removing expired language from this section.
The proposed bill is vague in terms of eligibility requirements to receive the tax credit, and there are no terms defined. Additionally, the bill does not address the refundability of the tax credit and whether or not the credit must be claimed in the year of graduation.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov