FISCAL NOTE
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
A New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this legislation is to create a High Growth Business Investment Tax Credit to encourage investment by West Virginia citizens and businesses in the research and development focused companies started by their fellow West Virginians. The suggested credit would equal to 50% of the angel or seed investment made by an individual or business in another, unrelated business certified as eligible for the “Strategic Research & Development Tax Credit” by the Tax Department. To ensure that this opportunity is not abused, there would be a cap of $500,000 on the amount of credit that can be used by the investors in any one business.
Passage of this bill will result in a reduction in the General Revenue Fund of up to $4 million in FY 2005 and up to $10 million in succeeding fiscal years, until the termination of the program.
Additional administrative costs to the State Tax Department associated with this bill would be approximately $5,000 in FY 2004, $34,000 in FY 2005 and $21,000 in succeeding years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2004
Increase/Decrease
(use"-") |
2005
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
5,000 |
34,000 |
21,000 |
| Personal Services |
0 |
21,000 |
21,000 |
| Current Expenses |
5,000 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
13,000 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-4,000,000 |
-10,000,000 |
Explanation of above estimates (including long-range effect):
This bill would create a High Growth Business Investment Tax Credit to encourage investment by West Virginia citizens and businesses in the research and development focused companies started by their fellow West Virginians. The credit would equal to 50% of the angel or seed investment made by an individual or business in another, unrelated business certified as eligible for the “Strategic Research & Development Tax Credit” by the Tax Department. There would be a cap of $500,000 on the amount of credit that can be used by the investors in any one business.
Passage of this bill will result in a reduction in the General Revenue Fund of up to $4 million in FY 2005 and up to $10 million in succeeding fiscal years, until the termination of the program.
Additional administrative costs to the State Tax Department associated with this bill would be approximately $5,000 in FY 2004, $34,000 in FY 2005 and $21,000 in succeeding years.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us