FISCAL NOTE

Date Requested: February 12, 2019
Time Requested: 12:53 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
3042 Introduced HB3013
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 tax credit against West Virginia personal income tax liability in the amount of payments made on student loans; providing the credit may be used in the graduation year; providing for a maximum term of 9 years to claim the credit after the year of graduation; establishing definitions; and establishing the Tax Commissioner to require forms, schedules, returns, or filings to claim the credit. While the bill creates a tax credit for the payment of student loans and interest. There is no adjustment apparent for student loan interest already deducted from federal adjusted gross income. The proposed credit is allowed for payments made on student loans. The credit is equal to 10% of the principal amount of the graduate’s qualified student loans plus interest paid during the tax year or the amount of principal and interest paid during the tax year but not to exceed the taxpayer’s Personal Income Tax Liability. The State Tax Department does not have sufficient information to accurately estimate the revenue loss from this proposal, but the loss would be substantial. Additional administrative costs incurred by the State Tax Department would be $65,000 in FY2021 and $40,000 in fiscal years thereafter.



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 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 proposed credit is allowed for payments made on student loans. The credit is equal to 10% of the principal amount of the graduate’s qualified student loans plus interest paid during the tax year or the amount of principal and interest paid during the tax year but not to exceed the taxpayer’s Personal Income Tax Liability. The State Tax Department does not have sufficient information to accurately estimate the revenue loss from this proposal, but the loss would be substantial. Additional administrative costs incurred by the State Tax Department would be $65,000 in FY2021 and $40,000 in fiscal years thereafter.  



Memorandum


The stated purpose of this bill is to provide a tax credit against West Virginia personal income tax liability in the amount of payments made on student loans; providing the credit may be used in the graduation year; providing for a maximum term of 9 years to claim the credit after the year of graduation; establishing definitions; and establishing the Tax Commissioner to require forms, schedules, returns, or filings to claim the credit. While the bill creates a tax credit for the payment of student loans and interest. There is no adjustment apparent for student loan interest already deducted from federal adjusted gross income. While the bill creates a tax credit for the payment of student loans and interest, there is no adjustment apparent for student loan interest already deducted from federal adjusted gross income. Qualified student loan seems to have different meanings in the bill.



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