FISCAL NOTE

Date Requested: February 08, 2017
Time Requested: 05:40 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1377 Introduced HB2148
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 provide taxpayers repaying their own student loans a modification reducing federal adjusted gross in the amount of the interest paid for personal income tax purposes. The proposed decreasing modification is allowed for student loan interest not taken as a modification to income on the federal return for taxable years beginning after December 31, 2017. Currently, student loan interest up to $2,500 per taxpayer can be taken as both a federal modification and above the line State deduction by taxpayers whose income is less than $80,000 ($160,000 for joint taxpayers). The provisions of this bill would expand the State deduction for those with interest cost in excess of $2,500 and for those with incomes in excess of the current ceilings set for this deduction. The annual cost of the current State student interest deduction is roughly $2.6 million. We are unable to accurately determine the additional revenue loss from this proposal. Additional administrative costs would be $12,000 in FY2019 and $6,000 in subsequent fiscal years.



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 6,000
Personal Services 0 0 6,000
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 proposed decreasing modification is allowed for student loan interest not taken as a modification to income on the federal return for taxable years beginning after December 31, 2017. Currently, student loan interest up to $2,500 per taxpayer can be taken as both a federal modification and above the line State deduction by taxpayers whose income is less than $80,000 ($160,000 for joint taxpayers). The provisions of this bill would expand the State deduction for those with interest cost in excess of $2,500 and for those with incomes in excess of the current ceilings set for this deduction. The annual cost of the current State student interest deduction is roughly $2.6 million. We are unable to accurately determine the additional revenue loss from this proposal. Additional administrative costs would be $12,000 in FY2019 and $6,000 in subsequent fiscal years.



Memorandum






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