FISCAL NOTE

Date Requested: February 24, 2021
Time Requested: 01:51 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1523 Introduced HB2735
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 create a tax credit for living and deceased organ donors. According to our interpretation, this bill would allow a Personal Income Tax credit to any living or deceased individual that donates an organ for the year that they donate. If the credit exceeds the tax liability, then it may be carried over to the next taxable year. Passage of this bill could result in an average loss of $400,000 per year. Additional administrative costs incurred by the State Tax Department would be $40,000 for FY2022 and $10,000 in FY2023 and subsequent fiscal years.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2021
Increase/Decrease
(use"-")
2022
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 30,000 10,000
Personal Services 0 10,000 10,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 20,000 0
2. Estimated Total Revenues 0 -400,000 -400,000


Explanation of above estimates (including long-range effect):


This bill would allow a Personal Income Tax credit of $2,500 to a living individual that donates an organ for the year that they donate; and a Personal Income Tax credit of $5,000 to the estate of any deceased individual that donates an organ for the year that they donate. If the credit exceeds the tax liability, then it may be carried over to the next taxable year. Passage of this bill could result in an average loss of $400,000 per year. Additional administrative costs incurred by the State Tax Department would be $40,000 for FY2022 and $10,000 in FY2023 and subsequent fiscal years.



Memorandum


The stated purpose of this bill is to create a tax credit for living and deceased organ donors. Under this bill a tax credit against a taxpayer’s personal income tax liability is created for living and deceased taxpayers who have donated organs for human organ transplantation. A taxpayer who donates his or her organ or organs while he or she is living, may claim a credit in the amount of up to $2,500 during the taxable year during which the organ transplant occurred. If the credit exceeds the taxpayer’s tax liability for that year, the excess credit may be carried over to the next taxable year. The estate of a taxpayer who has donated his or her organ or organs may claim a credit in the amount of up to $5,000 during the taxable year during which the organ transplant occurred. If the credit exceeds the taxpayer’s tax liability for that year, the excess credit may be carried over to the next taxable year. Providing a tax credit for the “donation” of a human organ for transplant purposes may violate the federal National Organ Transplant Act, which prohibits the sale of human organs. The tax credit could be interpreted as payment for an organ. This threat might be avoided if the tax credit is offered as a reimbursement credit for unreimbursed out-of-pocket expenses associated with living organ donation consistent with federal regulations. The bill contains language as to initial applicability of the credit but does not contain an effective date.



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