FISCAL NOTE
Date Requested: January 26, 2023
Time Requested: 02:45 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2891 |
Introduced |
HB3089 |
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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 provide tax credits for employer provided and employer sponsored childcare facilities; define terms; set amount of credit; establish terms for the credit; require certain actions when a recapture event occurs; and provide rulemaking.
The current childcare tax credits include a credit allowing for 50 percent of the cost of operation less any amounts paid by employees along with a credit for capital investment equal to 50 percent of the cost of all qualified childcare property to be claimed at a rate of 20 percent over a period of five years. This bill simply increases the operating cost credit to 75 percent and increases the capital investment credit to 100 percent of the cost of the cost of the qualified childcare property to be claimed at a rate of 10 percent per year over a period of ten years.
Passage of this bill will likely yield a reduction in the General Revenue Fund of some significance beginning in FY2024 largely due to the expansion of the current tax credits related to capital investment and operating costs of a childcare facility.
Additional administrative costs incurred by the State Tax Department would be $105,000 in FY2024 and $75,000 per year 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 |
105,000 |
75,000 |
| Personal Services |
0 |
75,000 |
75,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
30,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The current childcare tax credits include a credit allowing for 50 percent of the cost of operation less any amounts paid by employees along with a credit for capital investment equal to 50 percent of the cost of all qualified childcare property to be claimed at a rate of 20 percent over a period of five years. This bill simply increases the operating cost credit to 75 percent and increases the capital investment credit to 100 percent of the cost of the cost of the qualified childcare property to be claimed at a rate of 10 percent per year over a period of ten years.
Passage of this bill will likely yield a reduction in the General Revenue Fund of some significance beginning in FY2024 largely due to the expansion of the current tax credits related to capital investment and operating costs of a childcare facility.
Additional administrative costs incurred by the State Tax Department would be $105,000 in FY2024 and $75,000 per year in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to provide tax credits for employer provided and employer sponsored child care facilities; define terms; set amount of credit; establish terms for the credit; require certain actions when a recapture event occurs; and provide rulemaking.
The title of this bill lacks clarity. It incorrectly identifies the purpose of this bill as adding a new section designated §11-13MM-1 rather than adding a new article designated §11-13MM-1. Further, it does not include the requirement that a childcare facility be commissioned or licensed as a day care facility under a non-existent statute. It also ignores the fact that the current childcare facility credit exists in current law per W.Va. Code §11-21-97. This bill should repeal the provisions of the current childcare facility credit before creating a new article.
The bill also does not specify which tax the proposed credit offsets. In addition, the bill refers to Chapter 11, Article 13MM as imposing a tax, which is incorrect.
This bill does not contain an effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov