FISCAL NOTE
Date Requested: March 04, 2025
Time Requested: 04:15 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3405 |
Introduced |
HB3143 |
|
|---|
| CBD Subject: |
Labor |
|---|
|
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 for the Workforce Education Partnership Act.
According to our interpretation, a business owner who contracts out their employees to participate in vocational training programs or high school classes would qualify for a tax credit equivalent to 100 percent of the gross wages paid during the period in which the employee is engaged in such educational activities. A business owner may not claim more than $50,000 in total tax credits per tax year. Ohio has a similar credit equal to 15 percent of gross wages that costs $5.0 million per year. The proposed West Virginia credit is capped at $5.0 million per year with credits granted on a first-come first served basis. With the State covering all the costs for this Workforce Education Partnership, the revenue loss to the General Revenue Fund will be $5.0 million per year.
Additional administrative costs incurred by the State Tax Department would be $42,900 in FY2026 and $24,750 in FY2027 and thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
42,900 |
24,750 |
| Personal Services |
0 |
24,750 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
0 |
16,500 |
0 |
| 2. Estimated Total Revenues |
0 |
-5,000,000 |
-5,000,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, a business owner who contracts out their employees to participate in vocational training programs or high school classes would qualify for a tax credit equivalent to 100 percent of the gross wages paid during the period in which the employee is engaged in such educational activities. A business owner may not claim more than $50,000 in total tax credits per tax year. Ohio has a similar credit equal to 15 percent of gross wages that costs $5.0 million per year. The proposed West Virginia credit is capped at $5.0 million per year with credits granted on a first-come first served basis. With the State covering all the costs for this Workforce Education Partnership, the revenue loss to the General Revenue Fund will be $5.0 million per year.
Additional administrative costs incurred by the State Tax Department would be $42,900 in FY2026 and $24,750 in FY2027 and thereafter.
Memorandum
The stated purpose of this bill is to provide for the Workforce Education Partnership Act.
There is some ambiguity about whether the employees can be contracted out for “mentoring”. It is also not clear in this bill whether any compensation received from the employer’s participation in the program is considered income to the employee, the employer or both or whether it just depends on the terms of the contract. Also, the difference between the State’s fiscal year and the calendar year used by most businesses may cause some confusion in this bill.
It is unclear in this bill whether the apprentice can be the same employee who is contracted out as a teacher, trainer, or mentor under this proposed program or whether one employee can be the teacher, trainer, or mentor to another employee who is an apprentice. This bill also does not specify what tax the credit can be applied against. The bill’s language is also not clear about the annual reporting requirements. Specifically, it is not clear whether this bill generally covers all tax credits or is limited to the tax credit proposed by this bill.
It is unclear whether the “online application portal” referred to in this bill would be limited to the online option of filing a tax return claiming the credit or whether the Department of Revenue (not the Tax Commissioner) is responsible for developing an online application portal that will include all the duties assigned to the Department of Education under this bill.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov