FISCAL NOTE
Date Requested: February 15, 2023
Time Requested: 01:50 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1821 |
Introduced |
SB61 |
|
|---|
| CBD Subject: |
Actions, Suits and Liens |
|---|
|
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 education institution, community or technical college, or trades 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, 2024. The revenue loss from this proposed bill would be $6.2 million in FY2025 and would increase each year to $30.9 million for the fifth tax year.
Additional administrative costs incurred by the Tax Department would be $108,000 in FY2025 and $90,000 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 |
0 |
90,000 |
| Personal Services |
0 |
0 |
90,000 |
| 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 |
-30,900,000 |
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, 2024. The revenue loss from this proposed bill would be $6.2 million in FY2025 and would increase each year to $30.9 million for the fifth tax year.
Additional administrative costs incurred by the Tax Department would be $108,000 in FY2025 and $90,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to provide new graduates of an in-state or out-of-state higher education 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.
Some of this credit’s requirements are vague, and no terms are defined, such as “four-year educational institution.” The bill is unclear on whether a graduate with a two-year degree from a four-year educational institution would qualify. The bill is unclear on whether it applies to degrees beyond a bachelors. The bill is unclear on whether “graduation” entails a degree, or whether a certificate would suffice. The bill is unclear on whether the five-year period for claiming the credit must be in consecutive years. The bill does not state whether the credit is refundable. The bill is unclear on whether the credit may be claimed the year of graduation or must be claimed the year of graduation.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov