FISCAL NOTE
Date Requested: January 24, 2023
Time Requested: 12:58 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2784 |
Introduced |
HB2966 |
|
|---|
| 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 establish a tax credit for owners or lessors of residential properties that allow for a first time or second chance opportunity for housing to houseless individuals, justice impacted persons, assault victims, veterans, and adults who age out of the foster care system. The bill also provides for rule-making authority.
This bill would allow for landlords that rent to certain tenants to claim a tax credit against their personal income tax of 15 percent. The basis of the 15 percent tax credit is undefined in this bill. The list of individuals includes people who are houseless, justice impacted, assault victims, veterans, and adults who age out of the foster care system. Due to a lack of a definition of credit basis and reliable data concerning the population of such groups, the estimated amount of revenue loss from this bill cannot be reasonably estimated.
Administrative costs would be $10,000 in FY2024 and $5,000 in subsequent 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 |
10,000 |
5,000 |
| Personal Services |
0 |
0 |
5,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
This bill would allow for landlords that rent to certain tenants to claim a tax credit against their personal income tax of 15 percent. The basis of the 15 percent tax credit is undefined in this bill. The list of individuals includes people who are houseless, justice impacted, assault victims, veterans, and adults who age out of the foster care system. Due to a lack of a definition of credit basis and reliable data concerning the population of such groups, the estimated amount of revenue loss from this bill cannot be reasonably estimated.
Administrative costs would be $10,000 in FY2024 and $5,000 in subsequent years.
Memorandum
The stated purpose of this bill is to establish a tax credit for owners or lessors of residential properties that allow for a first time or second chance opportunity for housing to houseless individuals, justice impacted persons, assault victims, veterans, and adults who age out of the foster care system. The bill also provides for rule-making authority.
The bill allows the Department of Revenue to promulgate legislative rules to implement the bill’s provisions. However, in the case of the proposed tax credit, such rules would have to be so extensive that it would amount to legislation by the executive branch.
As written, the credit is in addition to only those reducing modifications set forth in §11-21-12. Apparently, the credit would not be in addition to reducing modifications found in other sections of the Code.
The bill provides that an owner or lessor who “allow[s]” for such “first time or second chance opportunity for housing” to the undefined individuals “shall be eligible for a 15 percent tax credit against personal income tax. The bill fails to identify whether the 15 percent means 15 percent of rent received, 15 percent of federal adjusted gross income, 15 percent of taxable income, or 15 percent of tax due. The bill fails to explain whether the credit is to be prorated in the case of housing that lasts less than a year. The bill fails to explain whether the credit will apply for multiple years as long as the person is receiving housing or if the credit only applies to the first year. The bill does not address whether the landlord is limited in the amount of rent charged.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov