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 phase-in a reduction of the corporate net income tax rate from nine percent to six percent by reducing the rate by one-half percent per year, commencing July 1, 2005.
    
    According to our interpretation, passage of this bill would result in a decline in the General Revenue Fund as shown in the table below.
    
     General Revenue Fund
    
    FY2006 ($4.3 million)
    
    FY2007 ($11.1 million)
    
    FY2008 ($18.0 million)
    
    FY2009 ($24.9 million)
    
    FY2010 ($31.9 million)
    
    FY2011 ($37.6 million)
    
    FY2012 ($40.9 million)
    
    FY2013 ($42.9 million)
    
    FY2014+ ($44.9 million)
    
    Additional administrative costs to the Tax Department associated with this bill would be approximately $27,000 in Fiscal Year 2005 and approximately $16,000 per year in Fiscal Year 2006 through 2010.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 27,000 16,000 16,000
Personal Services 0 0 0
Current Expenses 27,000 16,000 16,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -4,300,000 -44,900,000


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


    This bill would phase-in a reduction of the corporate net income tax rate from nine percent to six percent by reducing the rate by fifty one hundredths of one percent per year, commencing July 1, 2005.
    
    According to our interpretation, passage of this bill would result in a decline in the General Revenue Fund as shown in the table below.
     General Revenue Fund
    
    FY2006 ($4.3 million)
    
    FY2007 ($11.1 million)
    
    FY2008 ($18.0 million)
    
    FY2009 ($24.9 million)
    
    FY2010 ($31.9 million)
    
    FY2011 ($37.6 million)
    
    FY2012 ($40.9 million)
    
    FY2013 ($42.9 million)
    
    FY2014+ ($44.9 million)
    
    Additional administrative costs to the Tax Department associated with this bill would be for printing and mailing information material and revised returns to taxpayers and for modifying computer addressing and audit programs.



Memorandum


    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kpetry@tax.state.wv.us