FISCAL NOTE

Date Requested: February 05, 2020
Time Requested: 12:51 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2972 Introduced SB693
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 the bill is to provide for a $5,000 tax credit for service by volunteer firefighters to West Virginia Personal Income Tax liabilities. The proposed bill would allow volunteer firefighters with over 1 year of experience a tax credit of $5,000 or the total amount of personal income tax liability. If a household files married filing jointly and both individuals are volunteer firefighters with over a year of service, the tax credit can be $10,000 during a taxable year or the total amount of personal income liability The revenue loss associated with this proposal cannot be readily determined because it is unclear what the amount of allowable credit is or if the credit is refundable. However, the revenue loss associated with this proposed tax credit would be significant. Additional administrative costs to the State Tax Department would be $56,000 in FY2022 and $40,000 in subsequent 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 proposed bill would allow volunteer firefighters with over 1 year of experience a tax credit of $5,000 or the total amount of personal income tax liability. If a household files married filing jointly and both individuals are volunteer firefighters with over a year of service, the tax credit can be $10,000 during a taxable year or the total amount of personal income liability The revenue loss associated with this proposal cannot be readily determined because it is unclear what the amount of allowable credit is or if the credit is refundable. However, the revenue loss associated with this proposed tax credit would be significant. Additional administrative costs to the State Tax Department would be $56,000 in FY2022 and $40,000 in subsequent years.



Memorandum


The stated purpose of the bill is to provide for a $5,000 tax credit for service by volunteer firefighters to West Virginia Personal Income Tax liabilities. The title states, in part: …providing that the form must be sent to the Tax Commission to receive the tax credit… The bill requires the volunteer firefighter to obtain a specified certificate from the volunteer fire department and send it to the West Virginia State Fire Commission (hereinafter, “Commission”). There is no obvious connection of the certificate submitted to the Fire Commission and the form submitted to the Tax Commission. The credit is $5,000 during a taxable year “or the total amount of tax imposed by Personal Income Tax in the year of active membership.” The bill does not indicate whether the credit would be the lesser or greater of those two amounts. If two taxpayers filing a joint return are both eligible for the credit, then the amount of the credit is $10,000 “or the total amount of tax,” again with no indication whether the credit would be the lesser or greater of those two amounts. The bill also does not indicate if the credit is refundable.



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