FISCAL NOTE
Date Requested: January 17, 2023
Time Requested: 04:55 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1969 |
Introduced |
HB2635 |
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|---|
| CBD Subject: |
|
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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 exempt personal income earned by individuals working as teachers at primary and secondary schools from personal income tax.
The bill, as written, would exempt income earned by an individual from working as a teacher at a primary or secondary school in West Virginia. If the bill is interpreted to only include pay received by teachers for their employment by county boards of education or a private school, passage of this bill would result in a loss of revenue to the State General Revenue Fund of at least $56.2 million in FY2024. As written, the decreasing modification would only be available for the 2023 tax year. If the bill is interpreted to include all income received by teachers, the impact would be greater.
Additional administrative costs to the State Tax Department would be $36,500 in FY2024 and $25,000 in fiscal years thereafter.
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 |
36,500 |
25,000 |
| Personal Services |
0 |
25,000 |
25,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,500 |
0 |
| Other |
0 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-56,200,000 |
0 |
Explanation of above estimates (including long-range effect):
The bill, as written, would exempt income earned by an individual from working as a teacher at a primary or secondary school in West Virginia. If the bill is interpreted to only include pay received by teachers for their employment by county boards of education or a private school, passage of this bill would result in a loss of revenue to the State General Revenue Fund of at least $56.2 million per year beginning in FY2024. If the bill is interpreted to include all income received by teachers, the impact would be greater.
Additional administrative costs to the State Tax Department would be $36,500 in FY2024 and $25,000 in fiscal years thereafter.
Memorandum
The stated purpose of this bill is to exempt personal income earned by individuals working as teachers at primary and secondary schools from personal income tax.
The bill does not make it clear that income must be earned from work as a teacher. It could be argued that all income of a teacher at a primary or secondary school would be exempt.
The bill does not define teacher or primary and secondary school. It is unclear whether teacher’s aides, coaches, speech therapists or individuals working in similar positions at a primary or secondary school would be entitled to the modification. It is also unclear whether teachers providing services to homebound students would be entitled to the modification because they work inside the student’s home rather than at the primary or secondary school.
The modification is limited to teachers that work in primary and secondary school in West Virginia. A West Virginia resident who works as a teacher in a primary or secondary school in another state would not be eligible for this modification.
As drafted, the bill would only be applicable for one tax year because the bill states “for the taxable year beginning after December 31, 2022’.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov