FISCAL NOTE

Date Requested: March 01, 2017
Time Requested: 12:14 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2770 Introduced SB487
CBD Subject: Taxation


FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The stated purpose of this bill is to provide a tax credit to eligible caregivers for expenses of modifications to homes made more accessible for an elderly person or a person with a disability, lease or purchase of equipment, or other goods or services.
    
    The bill creates a new article in the Code designated 11-28-1 et seq., bearing the title “Livable-Home Tax Credit for Caregivers. The bill would provide a tax credit for unreimbursed out-of-pocket expenditures by a “family caregiver” to make a residence more accessible or safe for a family member who requires assistance with at least one daily living activity. The maximum credit available is $1,000 per care recipient per year.
    
    The proposed bill, if passed, would be effective for Tax Year 2018. Under the assumption that 10% of eligible taxpayers would have qualified expenses is a given year, the passage of this bill would generate a loss of General Revenue Funds of roughly $19 million in FY2019 and for each year thereafter.
    
    Additional administrative costs incurred by the State Tax Department are expected to be $113,000 in FY2019 and $96,000 for each year thereafter.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 96,000
Personal Services 0 0 96,000
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 -19,000,000


Explanation of above estimates (including long-range effect):


    The bill creates a new article in the Code designated 11-28-1 et seq., bearing the title “Livable-Home Tax Credit for Caregivers. The bill would provide a tax credit for unreimbursed out-of-pocket expenditures by a “family caregiver” to make a residence more accessible or safe for a family member who requires assistance with at least one daily living activity. The maximum credit available is $1,000 per care recipient per year.
    
    The proposed bill, if passed, would be effective for Tax Year 2018. Under the assumption that 10% of eligible taxpayers would have qualified expenses is a given year, the passage of this bill would generate a loss of General Revenue Funds of roughly $19 million in FY2019 and for each year thereafter.
    
    Additional administrative costs incurred by the State Tax Department are expected to be $113,000 in FY2019 and $96,000 for each year thereafter.
    



Memorandum


    The stated purpose of this bill is to provide a tax credit to eligible caregivers for expenses of modifications to homes made more accessible for an elderly person or a person with a disability, lease or purchase of equipment, or other goods or services.
    
    Although the statement of legislative purpose suggests the purpose of the bill is to help caregivers whose earnings are below the average median income level, the credit would be available to households earning up to $150,000, which is 356% of the West Virginia median household income.
    
    The third paragraph of section 1 contains two possible punctuation errors: the apostrophe in the word “caregiver’s” appears to be in the wrong place and there is an extra comma in the third sentence of the same paragraph which effects the meaning of the sentence.
    
    The credit could be applied against the caregiver’s “total state liability incurred under state statute for the taxable year”. This phrase is too broad and unclear.
    
    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov