FISCAL NOTE

Date Requested: February 11, 2021
Time Requested: 02:02 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2517 Introduced SB241
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 new graduates of an in-state or out-of-state higher educational institution, community or technical college, or trade school, a $1,000 tax credit on the income tax of the graduate for five taxable years; providing rule-making authority to the Tax Commissioner; and removing expired language from this section. The proposed bill provides a tax credit to college graduates of up to $1,000 against their Personal Income Tax. This credit may be claimed for five taxable years, including the graduation year. Absent an effective date in the bill, this credit would be available for tax years beginning on or after January 1, 2022. The revenue loss from this proposed bill would be $6.4 million in FY2023 and would increase each year to $31.8 million for the fifth tax year. Additional administrative costs to the State Tax Department would be $56,000 in FY 2023 and $40,000 in subsequent 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 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 -31,800,000


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


The proposed bill provides a tax credit to college graduates of up to $1,000 against their Personal Income Tax. This credit may be claimed for five taxable years, including the graduation year. Absent an effective date in the bill, this credit would be available for tax years beginning on or after January 1, 2022. The revenue loss from this proposed bill would be $6.4 million in FY2023 and would increase each year to $31.8 million for the fifth tax year. Additional administrative costs to the State Tax Department would be $56,000 in FY 2023 and $40,000 in subsequent years.



Memorandum


The stated purpose of this bill is to provide new graduates of an in-state or out-of-state higher educational institution, community or technical college, or trade school, a $1,000 tax credit on the income tax of the graduate for five taxable years; providing rule-making authority to the Tax Commissioner; and removing expired language from this section. The proposed bill is vague in terms of eligibility requirements to receive the tax credit, and there are no terms defined. Additionally, the bill does not address the refundability of the tax credit and whether or not the credit must be claimed in the year of graduation.



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