FISCAL NOTE
Date Requested: February 13, 2023
Time Requested: 12:52 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3545 |
Introduced |
HB3403 |
|
|---|
| 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 the state corporation net income tax and the state personal income tax for expenditures related to the operation of existing employer-provided or sponsored childcare facilities.
According to our interpretation, the proposed tax credit for an operating childcare facility when combined with the current childcare tax credit for operating costs related to a childcare facility, cannot exceed 100 percent the tax liability of eligible credit recipients subject to the Personal Income Tax and Corporation Net Income Tax. The current child care tax credit allows for 50 percent of the cost of operation less any amounts paid by employees. This bill simply increases the current credit for operating a childcare facility from 50 percent to 100 percent by offering a new alternative tax credit without removing existing tax credits.
Passage of this bill would likely yield a reduction in the General Revenue Fund of some significance beginning in FY2024 largely due to the expansion of the current tax credit for operating a childcare facility through the creation of a new alternative tax credit at double the value of the current tax credits.
Additional administrative costs incurred by the State Tax Department would be $70,000 in FY2024 and $45,000 per year in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
70,000 |
45,000 |
| Personal Services |
0 |
45,000 |
45,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
25,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the proposed tax credit for an operating childcare facility when combined with the current childcare tax credit for operating costs related to a childcare facility, cannot exceed 100 percent the tax liability of eligible credit recipients subject to the Personal Income Tax and Corporation Net Income Tax. The current child care tax credit allows for 50 percent of the cost of operation less any amounts paid by employees. This bill simply increases the current credit for operating a childcare facility from 50 percent to 100 percent by offering a new alternative tax credit without removing existing tax credits.
Passage of this bill would likely yield a reduction in the General Revenue Fund of some significance beginning in FY2024 largely due to the expansion of the current tax credit for operating a childcare facility through the creation of a new alternative tax credit at double the value of the current tax credits.
Additional administrative costs incurred by the State Tax Department would be $70,000 in FY2024 and $45,000 per year in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to provide a tax credit against the state corporation net income tax and the state personal income tax for expenditures related to the operation of existing employer-provided or sponsored childcare facilities.
The title of this bill is insufficient. This bill references a recapture process that is not provided for in the body of this bill. If this bill is passed, it contains provisions in conflict with W.Va. Code §11-21-97 and W.Va. Code §11-24-24. This bill may disqualify a taxpayer from claiming the proposed credit if the taxpayer already claims the existing childcare facility credit.
This bill does not contain an effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov