FISCAL NOTE
Date Requested: February 01, 2023
Time Requested: 04:50 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1005 |
Introduced |
HB2035 |
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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 create an incentive for employers to hire people who are pursuing a formal program of recovery from substance abuse issues by allowing the employer to claim a tax credit for employing eligible individuals, with limits based upon the employer’s total number of employees overall.
According to our interpretation, the proposed bill provides Personal Income Tax and Corporation Net Income Tax credits for eligible taxpayers who hire qualified individuals participating in a program of substance abuse recovery. A certified employer may claim a credit each year for up to seven eligible employees, depending on the total number of employees in the business entity. The maximum credit allowed would be $2,000 per eligible individual hired and retained in employment. The Tax Department cannot accurately estimate the number of eligible businesses that would qualify for this tax credit nor the amount of tax credit claimed in any given year due to the confidentiality of data on people in programs of substance abuse recovery.
Additional administrative costs incurred by the State Tax Department would be $20,000 in FY2023 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 |
20,000 |
5,000 |
5,000 |
| Personal Services |
5,000 |
5,000 |
5,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
15,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the proposed bill provides Personal Income Tax and Corporation Net Income Tax credits for eligible taxpayers who hire qualified individuals participating in a program of substance abuse recovery. A certified employer may claim a credit each year for up to seven eligible employees, depending on the total number of employees in the business entity. The maximum credit allowed would be $2,000 per eligible individual hired and retained in employment. The Tax Department cannot accurately estimate the number of eligible businesses that would qualify for this tax credit nor the amount of tax credit claimed in any given year due to the confidentiality of data on people in programs of substance abuse recovery.
Additional administrative costs incurred by the State Tax Department would be $20,000 in FY2023 and $5,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to create an incentive for employers to hire people who are pursuing a formal program of recovery from substance abuse issues by allowing the employer to claim a tax credit for employing eligible individuals, with limits based upon the employer’s total number of employees overall.
The definition of “eligible taxpayer” incorrectly refers back to “this article” (i.e., proposed article 13MM) rather than Article 21 (Personal Income Tax) or Article 24 (Corporation Net Income Tax). Proposed Article 13MM does not impose a tax liability. The bill does not define “certified employer.” The bill is silent as to any requirements which need to be met regarding the “substance abuse monitoring program offered or administered by the taxpayer/employer.”
The bill does not specify how the credit is to be claimed in instances where there is more than one eligible taxpayer for the business. The bill does not address if the credit is refundable or subject to recapture. There is no effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov