FISCAL NOTE

Date Requested: January 13, 2022
Time Requested: 03:17 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1189 Introduced HB4081
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 for a tax credit for those West Virginia businesses who use water for their day-to-day operations, for production of their goods, or otherwise. The company must use recycled water from a city, town, or municipality’s sewage treatment plants. The amount of the tax credit shall be 10 percent. According to our interpretation of this bill, the proposed tax credit is insufficiently defined to accurately determine its fiscal impact. Administrative costs incurred by the Tax Department would be $10,000 in FY2023 and $5,000 in subsequent fiscal years.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2022
Increase/Decrease
(use"-")
2023
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 10,000 5,000
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 10,000 5,000
2. Estimated Total Revenues 0 0 0


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


According to our interpretation of this bill, the proposed tax credit is insufficiently defined to accurately determine its fiscal impact. Administrative costs incurred by the Tax Department would be $10,000 in FY 2023 and $5,000 in subsequent fiscal years.



Memorandum


The stated purpose of this bill is to provide for a tax credit for those West Virginia businesses who use water for their day-to-day operations, for production of their goods, or otherwise. The company must use recycled water from a city, town, or municipality’s sewage treatment plants. The amount of the tax credit shall be 10 percent. The second section of the bill purports to provide, for tax years beginning on or after January 1, 2023, a credit “against taxes otherwise imposed upon them in this code.” This language is so broad that it apparently provides a credit against every tax imposed anywhere in the West Virginia Code. An eligible entity must be a corporation, small business corporation, LLC, partnership, or unincorporated business that has a principal place of business in West Virginia; it must use water to maintain their day-to-day operations, for production of goods, or otherwise; and coordinate with a city, town, or municipality in West Virginia to use their recycled water from sewage treatment facilities in West Virginia. No definition of “recycled water” is provided. The third section states that an eligible entity “will be allowed a tax credit in the amount of 10 percent for their usage of water …” The water in this section is not qualified as being “recycled.” There is no indication of what amount the 10 percent is to be applied against. There is no indication of whether the 10 percent applies separately to each of the many taxes imposed under the code, or if the 10 percent is an aggregate. This bill is far too vague to allow for administration of this credit.



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