FISCAL NOTE
Date Requested: January 10, 2020
Time Requested: 03:36 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1376 |
Introduced |
HB4053 |
|
|---|
| 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 provide a personal income tax credit of $3,000 to parents or legal guardians who provide a year of home or private, primary or secondary education for their children. The credit is limited to $3,000 per taxpayer and not based on the number of children schooled. The bill authorizes rule-making.
The bill allows a 100 percent tax credit for qualified educational expenses up to a maximum of $3,000 for each taxpayer with a homeschooled child or a child enrolled in a private school, regardless of the number of children schooled. We are unable to accurately estimate the revenue loss associated with this bill, but the cost would be substantial. There are 20,400 children who are either homeschooled or attend private school in West Virginia. However, we do not know how many families either homeschool or enroll their children in private school. Under the assumption that the 20,400 students represent roughly 10,000 families and half of those families are homeschooling at a much lower cost than private schooling, the revenue loss could be roughly $20.0 million. 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 |
0 |
Explanation of above estimates (including long-range effect):
The bill allows a 100 percent tax credit for qualified educational expenses up to a maximum of $3,000 for each taxpayer with a homeschooled child or a child enrolled in a private school, regardless of the number of children schooled. We are unable to accurately estimate the revenue loss associated with this bill, but the cost would be substantial. There are 20,400 children who are either homeschooled or attend private school in West Virginia. However, we do not know how many families either homeschool or enroll their children in private school. Under the assumption that the 20,400 students represent roughly 10,000 families and half of those families are homeschooling at a much lower cost than private schooling, the revenue loss could be roughly $20.0 million. 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.
Memorandum
The stated purpose of this bill is to provide a personal income tax credit of $3,000 to parents or legal guardians who provide a year of home or private, primary or secondary education for their children. The credit is limited to $3,000 per taxpayer and not based on the number of children schooled. 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