FISCAL NOTE

Date Requested: February 08, 2017
Time Requested: 05:02 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1500 Introduced HB2094
CBD Subject:


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 allow a taxpayer a personal income tax credit for each dependent that participated in home educational instruction for the most recent academic year. Based on our interpretation, the proposed bill could result in an annual loss to the General Revenue Fund of up to $1.1 million per year, assuming full participation, beginning in FY2018 when eligible Personal Income Tax returns would be filed. Thereafter, the proposed bill could result in losses up to $1.2 million per year if enacted. As the credit is allowable for tax years beginning on or after January 1, 2017, there would be no fiscal effect in FY2017. There would be no additional administrative costs incurred by the State Tax Department for the remainder of FY2017. Additional administrative costs incurred are expected to be $47,000 in FY2018 and $35,000 for each year thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 47,000 35,000
Personal Services 0 42,000 35,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 1,000 0
Other 0 4,000 0
2. Estimated Total Revenues 0 -1,100,000 -1,200,000


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


Based on our interpretation, the proposed bill could result in an annual loss to the General Revenue Fund of up to $1.1 million per year, assuming full participation, beginning in FY2018 when eligible Personal Income Tax returns would be filed. Thereafter, the proposed bill could result in losses up to $1.2 million per year if enacted. As the credit is allowable for tax years beginning on or after January 1, 2017, there would be no fiscal effect in FY2017. There would be no additional administrative costs incurred by the State Tax Department for the remainder of FY2017. Additional administrative costs incurred are expected to be $47,000 in FY2018 and $35,000 for each year thereafter.



Memorandum


The stated purpose of this bill is to allow a taxpayer a personal income tax credit for each dependent that participated in home educational instruction for the most recent academic year. The language of the proposed bill may be construed in such a manner as to allow the tax credit for persons who fall under the other exceptions of West Virginia Code ยง18-8-1, such as children who attend private or parochial schools. The proposed bill may also introduce administrative difficulties with respect to the academic year. The bill creates an ambiguity which could result in a Taxpayer claiming, and thus qualifying for, the credit in two separate tax years for the fall and spring terms. The proposed bill also fails to specify how the credit will be administered and whether the credit should be refundable or nonrefundable.



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