FISCAL NOTE
Date Requested: January 16, 2023
Time Requested: 03:41 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2010 |
Introduced |
HB2586 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
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 allow a $30,000 poverty homestead exemption to an owner of a residence whose annual household income is at or below the latest federal poverty guidelines.
The revenue impact of this proposal on Property Tax collections cannot be accurately determined. We have no data on the number of taxpayers who are at or below the latest federal poverty guidelines as measured by the proposed criteria of this bill or the values of their property.
Additional administrative costs to the State Tax Department would be minimal. County assessors would incur additional costs to process claims for the poverty exemption.
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 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The revenue impact of this proposal on Property Tax collections cannot be accurately determined. We have no data on the number of taxpayers who are at or below the latest federal poverty guidelines as measured by the proposed criteria of this bill or the values of their property.
According to available U.S. Census data, roughly 17 percent of West Virginia residents live in poverty, and more than 75 percent of all residents own their own homes. Homeowners are a bit less likely to live in poverty than those who rent their housing. However, these statistics suggest that up to 10 percent of all homeowners may possibly have total income at or below the federal poverty guidelines. The provisions of this bill would exempt homeowners who have household income at or below the federal poverty guideline from payment of local school excess levy property taxes on their home with use of income tax returns as proof of income level even though income tax returns do not include total household income. Therefore, it is likely that several households with income above the federal poverty guideline levels would also effectively qualify for the proposed property tax exemption.
Additional administrative costs to the State Tax Department would be minimal. County assessors would incur additional costs to process claims for the poverty exemption.
Memorandum
The stated purpose of this bill is to allow a $30,000 poverty homestead exemption to an owner of a residence whose annual household income is at or below the latest federal poverty guidelines.
The State Constitution, Article X, Section 1b, Subsection C limits the homestead exemption to the first twenty thousand dollars of value of the property. Any change in the allowable amount of the exemption would require a constitutional amendment.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov