FISCAL NOTE
Date Requested: March 03, 2021
Time Requested: 11:07 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2412 |
Introduced |
HB2893 |
|
|---|
| 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 modify the Economic Opportunity Tax Credit allowed for locating corporate headquarters in this state and the credit for small business.
According to our interpretation of this bill, the portion of the Economic Opportunity Tax Credit related to relocating corporate headquarters to West Virginia would reduce the full-time employee requirement from fifteen people to five people on or after January 1, 2021. Additionally, the new jobs percentage related to corporate headquarters relocation to the State would be increased from 10 percent to 20 percent. The second part of this bill modifies the small business portion of the Economic Opportunity Tax Credit by reducing the jobs requirement for small businesses from ten new jobs to five new jobs within twelve months after placing the qualified investment into service.
Currently, the Economic Opportunity Tax Credit costs roughly $4.0 million per year. The proposed job requirement reduction would allow more taxpayers to be eligible for the modified Economic Opportunity Tax Credit. Based on past history with this program, the proposed changes would have a small impact on economic activity and tax revenues.
Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2022.
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 |
5,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
5,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation of this bill, the portion of the Economic Opportunity Tax Credit related to relocating corporate headquarters to West Virginia would reduce the full-time employee requirement from fifteen people to five people on or after January 1, 2021. Additionally, the new jobs percentage related to corporate headquarters relocation to the State would be increased from 10 percent to 20 percent. The second part of this bill modifies the small business portion of the Economic Opportunity Tax Credit by reducing the jobs requirement for small businesses from ten new jobs to five new jobs within twelve months after placing the qualified investment into service.
Currently, the Economic Opportunity Tax Credit costs roughly $4.0 million per year. The proposed job requirement reduction would allow more taxpayers to be eligible for the modified Economic Opportunity Tax Credit. Based on past history with this program, the proposed changes would have a small impact on economic activity and tax revenues.
Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2022.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov