FISCAL NOTE

Date Requested: February 10, 2021
Time Requested: 04:43 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1229 Introduced HB2217
CBD Subject:


FUND(S):

General Revenue Fund, local governments

Sources of Revenue:

General Fund local property tax revenue

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 exempt law-enforcement officers, who are members of a municipal paid police department, county sheriff’s office, or the State Police, from payment of income and personal property taxes. The revenue impact of this proposal on Property Tax collections cannot be determined. We have no data on the type and value of personal property owned by law-enforcement officers. However, the potential revenue loss to local governments would be significant. We are also unable to estimate the revenue impact from the Personal Income Tax modification in this bill. We have no data on the amount of income which would be received by law enforcement officers. The bill does not state that the income must be from the taxpayer’s work as a law enforcement officer. The potential loss of State General Revenue Fund would be significant. Additional administrative costs would be minimal.



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 0
Personal Services 0 0 0
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):


The revenue impact of this proposal on Property Tax collections cannot be determined. We have no data on the type and value of personal property owned by law-enforcement officers. However, the potential revenue loss to local governments would be significant. We are also unable to estimate the revenue impact from the Personal Income Tax modification in this bill. We have no data on the amount of income which would be received by law enforcement officers. The bill does not state that the income must be from the taxpayer’s work as a law enforcement officer. The potential loss of State General Revenue Fund would be significant. Additional administrative costs would be minimal.



Memorandum


The stated purpose of this bill is to exempt law-enforcement officers, who are members of a municipal paid police department, county sheriff’s office, or the State Police, from payment of income and personal property taxes. There are constitutional issues with the Property Tax provisions in this bill. The West Virginia Constitution, Article X, Section 1, allows the Legislature to exempt property that is used for certain charitable or public service purposes from property taxation. It does not allow exemptions based strictly on the status of the property owner. In addition, Article X, Section 1 of the Constitution allows the Legislature to exempt incomes below a fixed minimum from income taxation but does not allow exemptions based on a classification of persons by occupation. The bill does not allow similar benefits to other similarly situated State employees, like Department of Natural Resource officers or prison guards who have job duties similar to law enforcement officers. The bill does not state that the income must be from the individual’s work as a law enforcement officer. Therefore, all income received by a law enforcement officer could be subject to this modification. The bill does not define law enforcement officer. The bill amends an old version of W. Va. Code §11-21-12. The version of the Code in this bill does not include the amendments from the 2019 Legislative Session, in which a new subsection W. Va. Code §11-21-12(c)(8) was added, providing a modification for Social Security benefits. The bill title does not mention the effective date.



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