FISCAL NOTE
Date Requested: January 13, 2020
Time Requested: 01:02 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1352 |
Introduced |
HB4140 |
|
|---|
| CBD Subject: |
Education (K12) |
|---|
|
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 a personal income tax credit of $500 per child to parents or legal guardians who provide home or private, primary or secondary education for their children. The tax credit will be effective upon the completion of a school year. The bill authorizes rule-making.
Based on our interpretation, the proposed bill could result in an annual loss to the General Revenue Fund of up to $10.2 million per year, assuming full participation, beginning in FY2022. The bill allows a 100 percent tax credit for qualified educational expenses up to a maximum of $500 for each homeschooled child or a child enrolled in a private school. The bill becomes effective in Tax Year 2021.
Administrative costs incurred by the State Tax Department are estimated to be $51,000 for FY2022 and $40,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
40,000 |
| Personal Services |
0 |
0 |
40,000 |
| 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 |
-10,200,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill could result in an annual loss to the General Revenue Fund of up to $10.2 million per year, assuming full participation, beginning in FY2022. The bill allows a 100 percent tax credit for qualified educational expenses up to a maximum of $500 for each homeschooled child or a child enrolled in a private school. The bill becomes effective in Tax Year 2021.
Administrative costs incurred by the State Tax Department are estimated to be $51,000 for FY2022 and $40,000 in subsequent fiscal years. There is no requirement that expenses actually be incurred; however, significant review would be needed to assure eligibility.
Memorandum
The stated purpose of this bill is to provide a personal income tax credit of $500 per child to parents or legal guardians who provide home or private, primary or secondary education for their children. The tax credit will be effective upon the completion of a school year. The bill authorizes rule-making.
The bill would be very difficult to administer. The bill lacks provisions, such as reporting and recordkeeping requirements, and methodology to claim.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov