FISCAL NOTE
Date Requested: March 03, 2021
Time Requested: 01:15 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2042 |
Comm. Sub. |
HB2001 |
|
|---|
| CBD Subject: |
Taxation |
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|
FUND(S):
General Revenue Fund, West Virginia Jumpstart Savings Program Trust Fund, West Virginia Jumpstart Savings Program Expense Fund
Sources of Revenue:
General Fund West Virginia Jumpstart Savings Program Trust Fund, West Virginia Jumpstart Savings Program Expense Fund
Legislation creates:
Decreases Existing Revenue, Creates New Expense, Creates New Program, Creates New Fund: West Virginia Jumpstart Savings Program and Expense Funds
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to establish the Jumpstart Savings Program.
The proposed bill would create a program to allow residents to save and invest money to help cover the costs of pursuing a trade or occupation. Taxpayers would be allowed to take a deduction against the state personal income tax in an amount equal to a contribution to a Jumpstart Savings Account (JSA), up to $25,000 per tax year. Deduction in excess of $25,000 may carry forward over a period of five years.
An employer may claim a nonrefundable tax credit against the state personal income tax for a matching contribution to a JSA, of which an employee is the beneficiary, of up to $5,000 per year, per employee. An employer may claim a nonrefundable tax credit against the state corporation net income tax for a matching contribution to a JSA, of which an employee is the beneficiary, of up to $5,000 per year, per employee.
The proposed bill would create the Jumpstart Savings Board, to administer the program, and the following new funds: The West Virginia Jumpstart Savings Program Trust Fund and The West Virginia Jumpstart Savings Program Expense Fund. Expenses of the Jumpstart Savings Board are paid by the Treasurer’s Office. Any potential revenue loss to General Revenue Fund taxes should be minimal, especially during the initial years of implementation.
Tax Department administrative costs would be an $27,600, for FY 2023 and minimal in subsequent tax years. This fiscal note does not address costs for the Treasurer’s Office.
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 |
0 |
| Personal Services |
0 |
0 |
0 |
| 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 taxpayers to take a decreasing income modification for contributions made to the qualifying trust fund and employers to take nonrefundable tax credits against applicable state business income taxes for matching contributions. The Jumpstart Savings Program is somewhat unique, as 529 plans in many states already cover costs for trade and vocational training. The existing law that is most similar to the proposed Jumpstart Savings Program is the WVABLE account, which has shown minimal losses in the General Revenue Fund, assuming that there will be rules implemented to prevent taxpayers from misusing funds. As this new program may have low demand at the beginning of its implementation, General Revenue Fund losses may increase as demand rises in future years.
Tax Department administrative costs would be an $27,600, for FY 2023 and minimal in subsequent tax years. This fiscal note does not address costs for the Treasurer’s Office.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov