FISCAL NOTE
Date Requested: February 27, 2017
Time Requested: 01:41 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2752 |
Introduced |
SB452 |
|
|---|
| 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 create a West Virginia Earned Income Tax Credit at ten percent of the federal credit. The bill states certain requirements for eligibility for the tax credit. The bill makes the tax credit refundable. The bill allows a taxpayer claiming the tax credit to also apply for the low-income family tax credit. The bill authorizes rule-making.
According to our interpretation, the proposed bill would allow an Earned Income Tax Credit equal to 10 percent of the federal Credit allowed beginning in Tax Year 2017. Any additional credit in excess of the Taxpayer’s income tax liability would be refundable to the Taxpayer. The proposed bill is estimated to reduce General Revenue Fund collections by $35.5 million in FY2018 and $35.8 million for each year thereafter. Taxpayers who are eligible for both the proposed West Virginia Earned Income Tax Credit and the Family Tax Credit may apply for both credits.
Additional costs incurred by the State Tax Department would be $75,000 in FY2018 and $64,000 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 |
75,000 |
64,000 |
| Personal Services |
0 |
64,000 |
64,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
2,000 |
0 |
| Other |
0 |
9,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-35,500,000 |
-35,800,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the proposed bill would allow an Earned Income Tax Credit equal to 10 percent of the federal Credit allowed beginning in Tax Year 2017. Any additional credit in excess of the Taxpayer’s income tax liability would be refundable to the Taxpayer. The proposed bill is estimated to reduce General Revenue Fund collections by $35.5 million in FY2018 and $35.8 million for each year thereafter. Taxpayers who are eligible for both the proposed West Virginia Earned Income Tax Credit and the Family Tax Credit may apply for both credits.
Additional costs incurred by the State Tax Department would be $75,000 in FY2018 and $64,000 for each year thereafter.
Memorandum
The stated purpose of this bill is to create a West Virginia Earned Income Tax Credit at ten percent of the federal credit. The bill states certain requirements for eligibility for the tax credit. The bill makes the tax credit refundable. The bill also provides that any taxpayer who qualifies for the West Virginia earned income credit and the “low-income family tax credit” may take both credits. The bill authorizes rule-making.
The proposed bill may have a title defect. The bill title states that the bill “authorizes” rule-making but requires the Tax Commissioner to propose legislative rules. There also appears to be words missing under subdivision (1) where the bill states that “a taxpayer may credit against personal income tax…”.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov