FISCAL NOTE
Date Requested: March 12, 2021
Time Requested: 11:24 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3260 |
Introduced |
HB3103 |
|
|---|
| CBD Subject: |
Education (K12) |
|---|
|
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 an annual credit against personal income tax of $500 for teachers and school service personnel.
The proposed bill would create a Personal Income Tax credit of $500 for teachers and school service personnel. The bill is silent on a number of provisions, including but not limited to whether a qualifying teacher or school service personnel must work in a public or private school, if the taxpayer must be a West Virginia resident, or if the taxpayer must work in a West Virginia school. For the purpose of this analysis, we assume a qualifying teacher or school service personnel must work in a West Virginia-based primary or secondary school and that personnel in either public or private settings would qualify. Based on our understanding, the revenue loss from this credit for classroom teachers would be $19.3 million per year beginning in FY2023.
The State Tax Department would incur $35,000 in additional administrative costs in FY2023 and $20,000 per year 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 |
0 |
20,000 |
| Personal Services |
0 |
0 |
20,000 |
| 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 |
-19,300,000 |
Explanation of above estimates (including long-range effect):
The proposed bill would create a Personal Income Tax credit of $500 for teachers and school service personnel. The bill is silent on a number of provisions, including but not limited to whether a qualifying teacher or school service personnel must work in a public or private school, if the taxpayer must be a West Virginia resident, or if the taxpayer must work in a West Virginia school. For the purpose of this analysis, we assume a qualifying teacher or school service personnel must work in a West Virginia-based primary or secondary school and that personnel in either public or private settings would qualify. Based on our understanding, the revenue loss from this credit for classroom teachers would be $19.3 million per year beginning in FY2023.
The State Tax Department would incur $35,000 in additional administrative costs in FY2023 and $20,000 per year in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to provide an annual credit against personal income tax of $500 for teachers and school service personnel.
The bill is vague in certain areas. It is unclear if $500 is the maximum tax credit allowed, or if a married couple who both qualify, may each take a $500 tax credit, for a maximum of $1,000. It appears that the bill intends to limit the credit to those working in public school, but the tax credit language does not provide such limitation.
The bill contains no provisions requiring the tax credit to be taken against tax liabilities resulting from the income generated as a teacher or school service personnel. The bill is silent on whether any unused credit may be carried forward or carried back.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov