FISCAL NOTE
Date Requested: March 01, 2021
Time Requested: 11:41 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2437 |
Introduced |
SB507 |
|
|---|
| CBD Subject: |
|
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund local 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 facilitate prompt and effective response to any state of emergency in West Virginia by exempting out-of-state employees and businesses, including affiliates of in-state businesses, that temporarily provide resources and personnel in the state during a state of emergency from state tax and licensing requirements that would otherwise be applicable under the state’s residency requirements.
As written, this bill may result in a non-quantifiable revenue loss to the General Revenue Fund. It relates to out-of-state emergency responders aiding in disaster relief in West Virginia during a declared “State of Emergency”. Currently, West Virginia has reciprocal agreements with our surrounding states regarding out-of-state residents working in West Virginia. If an individual works in West Virginia and is a resident of Kentucky, Maryland, Ohio, Pennsylvania, or Virginia that individual does not have to pay West Virginia income taxes on their wages. This bill would affect emergency workers and businesses in the State temporarily to aid in disaster relief. It is standard practice for power companies to loan workers to each other in emergencies. These companies have mutual-aid contracts that require the host utility to lodge, feed and pay the guest workers. At least thirty-two states have adopted similar legislation, including all of the states adjoining West Virginia except for Kentucky.
While few companies will participate, the returns of such businesses could be exceedingly complicated due to the exclusion of certain activities. The Tax Department would incur additional costs if a State of Emergency was declared.
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):
As written, this bill may result in a non-quantifiable revenue loss to the General Revenue Fund. It relates to out-of-state emergency responders aiding in disaster relief in West Virginia during a declared “State of Emergency”. Currently, West Virginia has reciprocal agreements with our surrounding states regarding out-of-state residents working in West Virginia. If an individual works in West Virginia and is a resident of Kentucky, Maryland, Ohio, Pennsylvania, or Virginia that individual does not have to pay West Virginia income taxes on their wages. This bill would affect emergency workers and businesses in the State temporarily to aid in disaster relief. It is standard practice for power companies to loan workers to each other in emergencies. These companies have mutual-aid contracts that require the host utility to lodge, feed and pay the guest workers. At least thirty-two states have adopted similar legislation, including all of the states adjoining West Virginia except for Kentucky.
While few companies will participate, the returns of such businesses could be exceedingly complicated due to the exclusion of certain activities. The Tax Department would incur additional costs if a State of Emergency was declared.
Memorandum
The stated purpose of this bill is to facilitate prompt and effective response to any state of emergency in West Virginia by exempting out-of-state employees and businesses, including affiliates of in-state businesses, that temporarily provide resources and personnel in the state during a state of emergency from state tax and licensing requirements that would otherwise be applicable under the state’s residency requirements.
The exemption of property owned by out-of-state businesses but located within the state as of the assessment date may conflict with the State Constitution’s mandate that all property be taxed in proportion to its value.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov