FISCAL NOTE

Date Requested: February 10, 2021
Time Requested: 04:46 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1549 Introduced HB2238
CBD Subject:


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 personal income tax credit of $3,000 to parents or legal guardians who provide a year of home or private, primary or secondary education for their children. The credit is limited to $3,000 per taxpayer and not based on the number of children schooled. The bill authorizes rule-making. Based on our interpretation, the proposed bill would provide a Personal Income Tax credit of up to $3,000 per taxpayer for homeschooled children or children enrolled in private school beginning with Tax Year 2021. We are unable to estimate the revenue impact of this bill on the General Revenue Fund, but the loss would be significant. There are 22,000 children who are either homeschooled in West Virginia or attend private schools. However, we do not know how many families either homeschool or enroll their children in private school. Under the assumption that the 22,000 students represent roughly 10,000 families, the revenue loss could be roughly $30.0 million. Administrative costs incurred by the State Tax Department are estimated to be $51,000 for FY2022 and $40,000 in subsequent fiscal 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 51,000 40,000
Personal Services 0 40,000 40,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 1,000 0
Other 0 10,000 0
2. Estimated Total Revenues 0 -30,000,000 -30,000,000


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


Based on our interpretation, the proposed bill would provide a Personal Income Tax credit of up to $3,000 per taxpayer for homeschooled children or children enrolled in private school beginning with Tax Year 2021. We are unable to estimate the revenue impact of this bill on the General Revenue Fund, but the loss would be significant. There are 22,000 children who are either homeschooled in West Virginia or attend private schools. However, we do not know how many families either homeschool or enroll their children in private school. Under the assumption that the 22,000 students represent roughly 10,000 families, the revenue loss could be roughly $30.0 million. Administrative costs incurred by the State Tax Department are estimated to be $51,000 for FY2022 and $40,000 in subsequent fiscal years.



Memorandum


The stated purpose of this bill is to provide a personal income tax credit of $3,000 to parents or legal guardians who provide a year of home or private, primary or secondary education for their children. The credit is limited to $3,000 per taxpayer and not based on the number of children schooled. The bill authorizes rule-making. The bill lacks any definitions. The credit limitation is “per taxpayer”. There is no indication whether a married could (two taxpayers) could receive a total credit of $6,000.



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