FISCAL NOTE
Date Requested: February 15, 2022
Time Requested: 09:47 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2643 |
Introduced |
HB4819 |
|
|---|
| 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 a housing tax credit for teachers employed and residing in West Virginia for five years or greater.
The bill, as written, would allow a Personal Income Tax credit of $2,000 for teachers who have been employed in West Virginia and resided in West Virginia for five years if they are currently employed as a West Virginia teacher and reside in West Virginia. The bill is unclear as to which teachers qualify for this credit and fails to define the term “teacher”. If the credit is available for teachers at both public and private elementary and secondary schools, passage of this bill would result in a loss of revenue to the State General Revenue Fund of roughly $19.8 million per year beginning in FY2023. However, a broader interpretation would result in higher revenue losses for the State.
Additional administrative costs to the State Tax Department would be $61,500 in FY2023 and $45,000 in fiscal years thereafter.
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 |
61,500 |
45,000 |
| Personal Services |
0 |
45,000 |
45,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,500 |
0 |
| Other |
0 |
15,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-19,800,000 |
-19,800,000 |
Explanation of above estimates (including long-range effect):
The bill, as written, would allow a Personal Income Tax credit of $2,000 for teachers who have been employed in West Virginia and resided in West Virginia for five years if they are currently employed as a West Virginia teacher and reside in West Virginia. The bill is unclear as to which teachers qualify for this credit and fails to define the term “teacher”. If the credit is available for teachers at both public and private elementary and secondary schools, passage of this bill would result in a loss of revenue to the State General Revenue Fund of roughly $19.8 million per year beginning in FY2023. However, a broader interpretation would result in higher revenue losses for the State.
Additional administrative costs to the State Tax Department would be $61,500 in FY2023 and $45,000 in fiscal years thereafter.
Memorandum
The stated purpose of this bill is to provide a housing tax credit for teachers employed and residing in West Virginia for five years or greater.
The bill lacks definitions for “eligible taxpayer” and “teacher.” Given that the personal income tax is based on a calendar year and a typical school year is not, a teacher may be employed as such for a year and a half before being deemed to have been employed for a year. The bill does not indicate whether the five-year requirement means consecutive years. The language making the credit “for housing expenses” may be confusing as it might imply that the credit is somehow limited by a taxpayer’s verifiable housing expenses which are undefined.
The effective date is stated as “effective for the tax year beginning after December 1, 2021.” This may be a typographical error. If not, then it is a very odd effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov