FISCAL NOTE
Date Requested: February 04, 2019
Time Requested: 01:05 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1126 |
Introduced |
HB2845 |
|
|---|
| CBD Subject: |
Labor |
|---|
|
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 encourage establishment of apprenticeship programs by providing a tax credit against the personal and corporate income taxes. The bill also requires the Executive Director of Workforce West Virginia, the State Superintendent of Schools and the Commissioner of Labor to jointly establish a program combining high school curriculum and career and technology training with critical on-the-job training performed at a local business through a registered apprenticeship program.
According to the provisions of this bill, a taxpayer who employs an apprentice pursuant to an apprenticeship agreement registered with the Office of Apprenticeship of the Employment and Training Administration of the United States Department of Labor is allowed a tax credit equal to $1,000 for each apprentice employed. The proposed credit would be offsetting both Corporation Net Income Tax and Personal Income Tax liabilities. The current State Apprenticeship Tax Credit is equivalent to $2 per hour multiplied by the total number of hours worked by the tax year by the apprentice and may not exceed $2,000 or 50 percent of the actual wages paid, whichever is less. The cost of the current State credit program is roughly $300,000 per year for roughly 80 taxpayers. The proposed credit would be an additional credit for those taxpayers as well as a new credit for those not engaged in construction trades. We cannot readily determine how many taxpayers would take advantage of this new additional tax credit. However, total cost may approach or exceed the $300,000 associated with the other program because it would apply to all industries, not just construction.
Additional administrative costs incurred by the State Tax Department would be $45,000 in FY2021 and $20,000 per year in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
20,000 |
| Personal Services |
0 |
0 |
20,000 |
| 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 |
0 |
Explanation of above estimates (including long-range effect):
According to the provisions of this bill, a taxpayer who employs an apprentice pursuant to an apprenticeship agreement registered with the Office of Apprenticeship of the Employment and Training Administration of the United States Department of Labor is allowed a tax credit equal to $1,000 for each apprentice employed. The proposed credit would be offsetting both Corporation Net Income Tax and Personal Income Tax liabilities. The current State Apprenticeship Tax Credit is equivalent to $2 per hour multiplied by the total number of hours worked by the tax year by the apprentice and may not exceed $2,000 or 50 percent of the actual wages paid, whichever is less. The cost of the current State credit program is roughly $300,000 per year for roughly 80 taxpayers. The proposed credit would be an additional credit for those taxpayers as well as a new credit for those not engaged in construction trades. We cannot readily determine how many taxpayers would take advantage of this new additional tax credit. However, total cost may approach or exceed the $300,000 associated with the other program because it would apply to all industries, not just construction.
Additional administrative costs incurred by the State Tax Department would be $45,000 in FY2021 and $20,000 per year in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to encourage establishment of apprenticeship programs by providing a tax credit against the personal and corporate income taxes. The bill also requires the Executive Director of Workforce West Virginia, the State Superintendent of Schools and the Commissioner of Labor to jointly establish a program combining high school curriculum and career and technology training with critical on-the-job training performed at a local business through a registered apprenticeship program.
The bill may lack needed specificity and may be better placed in Chapter 11 of the W.Va. Code. This bill conflicts with an established apprenticeship credit for the construction trades.
The proposed legislation is silent as to any carryforward or carryback of the credit. The bill is silent as to any reclamation of the credit should the employer or apprentice not fulfill the apprenticeship contract. Where the apprenticeship is with construction trades, it conflicts with and may arguably supersede the credit under W.Va. Code ยง11-13W-1.
There is nothing in the provisions of this bill that indicates how this credit interacts with the existing State Apprenticeship Training Credit, therefore, multiple credit claims for the same apprentice seems likely to occur.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov