FISCAL NOTE
Date Requested: February 03, 2016 Time Requested: 02:41 PM |
Agency: |
Tax Department, State |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2321 |
Introduced |
SB489 |
|
CBD Subject: |
Taxation |
---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to establish a tax credit for physicians who are new graduates and locate in West Virginia to practice medicine for at least six years.
Based on our interpretation, the proposed bill would create a maximum $10,000 per year Personal Income Tax credit for up to three consecutive years per eligible physician. If passed, this bill would result in revenue losses of roughly $1.0 million per year in the General Revenue Fund for the first full year of implementation. As the proposed legislation provides that the credit be available for tax years beginning after December 31, 2016, TY2017 will be the first year the credit is available, affecting revenues beginning FY2018. It should be noted that, given eligible physicians can claim the credit for up to three years, it is plausible that revenue losses could increase to as much as $3.0 million in subsequent years of credit availability based on current assumptions.
There would be no additional administrative costs incurred by the State Tax Department for the remainder of FY2016 or in FY2017. There would be a one-time cost in FY2018 of $15,000.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2016 Increase/Decrease (use"-") |
2017 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 |
-3,000,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the proposed bill would create a maximum $10,000 per year Personal Income Tax credit for up to three consecutive years per eligible physician. If passed, this bill would result in revenue losses of roughly $1.0 million per year in the General Revenue Fund for the first full year of implementation. This estimate is based on roughly 100 eligible physicians locating to practice medicine in West Virginia after finishing an approved residency or fellowship program. As the proposed legislation provides that the credit be available for tax years beginning after December 31, 2016, TY2017 will be the first year the credit is available, affecting revenues beginning FY2018. It should be noted that, given eligible physicians can claim the credit for up to three years, it is plausible that revenue losses could increase to as much as $3.0 million in subsequent years of credit availability based on current assumptions.
There would be no additional administrative costs incurred by the State Tax Department for the remainder of FY2016 or in FY2017. There would be a one-time cost in FY2018 of $15,000.
Memorandum
The stated purpose of this bill is to establish a tax credit for physicians who are new graduates and locate in West Virginia to practice medicine for at least six years.
There is no requirement that the physician be practicing in West Virginia, and the term “eligible physician” is not defined. Further, this credit is limited to those graduating from all allopathic or osteopathic medical schools. Allopathic medicine is homeopathic, and osteopathic is whole body medicine. Thus it is unclear whether this credit encompasses every type of medical school and specialist. A list of acceptable medical degrees would be helpful.
The latter part of West Virginia Code §11-13DD-6(d) is confusing, as this is a credit and not a deduction.
The term “reasonably construed” in West Virginia Code §11-13DD-8 is vague and undefined.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov