FISCAL NOTE
Date Requested: January 17, 2018
Time Requested: 10:47 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2026 |
Introduced |
HB2508 |
|
|---|
| 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 create tax credits for new small businesses in order to assist and encourage the growth of small business owners in the State of West Virginia, as well as promoting job growth from within this state by hiring residents of the state, for those tax years beginning on or after January 1, 2017, through June 2025.
The bill allows a credit of up to $2,500 for each new full-time employee to any taxpayer who is based in and operates entirely within West Virginia and has less than 100 employees. The amount of credit may not exceed 50 percent of the wages paid or $2,500, whichever is less. The tax credit would be allowed against the Business Franchise Tax, Corporation Net Income Tax and Personal Income Tax liabilities. The Business Franchise Tax terminated on January 1, 2015. We cannot estimate the revenue impact of this bill because we do not know how many small businesses would qualify for this credit.
Additional administrative costs incurred by the State Tax Department would be $31,000 in FY2018, $45,000 in FY2019 and $35,000 in future fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2018
Increase/Decrease
(use"-") |
2019
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
31,000 |
45,000 |
35,000 |
| Personal Services |
15,000 |
35,000 |
35,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
1,000 |
0 |
0 |
| Other |
15,000 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The bill allows a credit of up to $2,500 for each new full-time employee to any taxpayer who is based in and operates entirely within West Virginia and has less than 100 employees. The amount of credit may not exceed 50 percent of the wages paid or $2,500, whichever is less. The tax credit would be allowed against the Business Franchise Tax, Corporation Net Income Tax and Personal Income Tax liabilities. The Business Franchise Tax terminated on January 1, 2015. We cannot estimate the revenue impact of this bill because we do not know how many small businesses would qualify for this credit.
Additional administrative costs incurred by the State Tax Department would be $31,000 in FY2018, $45,000 in FY2019 and $35,000 in future fiscal years.
Memorandum
The stated purpose of this bill is to create tax credits for new small businesses in order to assist and encourage the growth of small business owners in the State of West Virginia, as well as promoting job growth from within this state by hiring residents of the state, for those tax years beginning on or after January 1, 2017, through June 2025.
This bill would be difficult to enforce as written and would likely result in litigation. This bill would allow the tax credits to terminate at the end of the fiscal year, but the credits are determined based upon the calendar year.
The proposed article cannot be numbered 11-13DD since that West Virginia Code reference is taken by the West Virginia Farm to Food Bank Tax Credit.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov