FISCAL NOTE
Date Requested: January 11, 2023
Time Requested: 10:31 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1883 |
Introduced |
SB36 |
|
|---|
| 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 create and authorize a state child and child care tax credit.
Based on our interpretation, the proposed bill would establish a refundable personal income tax credit of either 20 percent of the federal childcare credit or 10 percent of the federal child tax credit, whichever is greater, for those Taxpayers whose federal adjusted gross income is not above $100,000. The effective date is January 1, 2023.
According to our interpretation, the legislation, if passed, would result in a decrease in General Revenue Fund collections of roughly $24.5 million in FY2024 and in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $61,500 in FY2024 and $5,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
61,500 |
5,000 |
| Personal Services |
0 |
45,000 |
5,000 |
| 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 |
-24,500,000 |
-24,500,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill would establish a refundable personal income tax credit of either 20 percent of the federal childcare credit or 10 percent of the federal child tax credit, whichever is greater, for those Taxpayers whose federal adjusted gross income is not above $100,000. The effective date is January 1, 2023.
According to our interpretation, the legislation, if passed, would result in a decrease in General Revenue Fund collections of roughly $24.5 million in FY2024 and in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $61,500 in FY2024 and $5,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to create and authorize a state child and child care tax credit.
This bill seeks to establish a child and childcare tax credit like the federal child tax credit and the federal childcare tax credit. Though both credits are to be created, taxpayers will only be able to seek one or the other of the credits in a given tax year.
No definition of “resident individuals” is given. Presumably, part-year residents may be eligible for the credit for the proportional part of the tax year for which they were a state resident.
The credit authorized by this section may not be claimed by any taxpayer if the federal adjusted gross income for the taxpayer is in excess of one hundred thousand dollars ($100,000). No reference is made to the filing status of the “taxpayer.” As the bill reads in the singular, it may be argued that taxpayers filing jointly may claim the credits if their joint federal adjusted gross income is not more than two hundred thousand dollars ($200,000). The intent of the bill on this point is uncertain.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov