FISCAL NOTE

Date Requested: January 12, 2022
Time Requested: 04:54 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1367 Introduced SB155
CBD Subject:


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 create a tax credit for individuals who successfully complete a firearms safety course. According to our interpretation, the proposed bill would create a non-refundable Personal Income Tax credit for individuals who successfully complete a firearms safety course. The credit is effective for tax years beginning January 1, 2022, and the maximum amount of credit per individual is $250 per person. The tax credit is not subject to carryback and unused credit is forfeited. The amount of credit is not based on costs incurred in enrolling and completing a firearms safety course. Therefore, the amount of credit claimed up to the maximum amount would only be limited by the taxpayer’s tax liability. As written, a taxpayer and each person in their household could earn and claim the credit in successive years. Based on our interpretation, the passage of the proposed legislation would create a loss in General Revenue collections of $3.0 million in FY2023 and in subsequent fiscal years. Additional administrative costs to the State Tax Department would be $27,500 for FY2023 and $22,500 for FY2024 and thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2022
Increase/Decrease
(use"-")
2023
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 27,500 22,500
Personal Services 0 22,500 22,500
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 -3,000,000 -3,000,000


Explanation of above estimates (including long-range effect):


According to our interpretation, the proposed bill would create a non-refundable Personal Income Tax credit for individuals who successfully complete a firearms safety course. The credit is effective for tax years beginning January 1, 2022, and the maximum amount of credit per individual is $250 per person. The tax credit is not subject to carryback and unused credit is forfeited. The amount of credit is not based on costs incurred in enrolling and completing a firearms safety course. Therefore, the amount of credit claimed up to the maximum amount would only be limited by the taxpayer’s tax liability. As written, a taxpayer and each person in their household could earn and claim the credit in successive years. Based on our interpretation, the passage of the proposed legislation would create a loss in General Revenue collections of $3.0 million in FY2023 and in subsequent fiscal years. Additional administrative costs to the State Tax Department would be $27,500 for FY2023 and $22,500 for FY2024 and thereafter.



Memorandum


The stated purpose of this bill is to create a tax credit for individuals who successfully complete a firearms safety course. The bill purports to authorize a credit of up to $250 for a “qualified individual” who enrolls in and successfully completes a firearm safety course. “Qualified individual” is not defined. The bill does not specify that only one credit is allowed per taxpayer or per taxpayer’s household. As written, a taxpayer and other household members may take a firearm safety course each year to receive the credit. One household could receive several credits over several years. It appears the credit can be taken in the amount of the cost of the safety course, not to exceed $250, although this could be more explicitly stated. Based upon the definition of “firearms safety course,” it appears that only courses for handguns can be claimed, and not hunting safety courses, rifle safety courses, etc. Although the Tax Commissioner has general administrative authority over the collection of taxes, there is no specific evidentiary requirement set forth to show that the course was successfully completed or the course’s cost.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov