Date Requested:February 25, 2005
Time Requested:12:19 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R640 Intro SB350
CBD Subject: Volunteer Work Credits
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 bill is to allow a credit against the West Virginia personal income tax for volunteer work for non-profit organizations.
    
    According to our interpretation, a taxpayer would be permitted to claim a credit against the Personal Income Tax. The credit would be equal to the State average hourly wage times the number of hours of volunteer work performed for an entity which qualifies for exemption from federal income tax under Sec. 501(c)(3) of the Internal Revenue Code. The current average hourly wage is in excess of $13. The credit is limited to $2,000 per tax year. The Tax Department does not have access to the data necessary to calculate the revenue impact of this proposal. Due to the lack of an internal effective date the credit would first apply to tax years beginning on or after January 1, 2006.
    
    Assuming that all returns were accepted as filed, there would be no additional administrative costs to the Tax Department associated with passage of this bill. Entities that qualify for exemption from federal income tax under Sec. 501(c)(3) of the Internal Revenue Code would likely have increased administrative expenses associated with passage of this bill.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
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 0
3. Explanation of above estimates (including long-range effect):
    Passage of this bill would permit a taxpayer to claim a credit against the Personal Income Tax. The credit would be equal to the State average hourly wage times the number of hours of volunteer work performed for an entity which qualifies for exemption from federal income tax under Sec. 501(c)(3) of the Internal Revenue Code. The current average statewide hourly wage is in excess of $13.The credit is limited to $2,000 per tax year. The Tax Department does not have access to the data necessary to calculate the revenue impact of this proposal. Under the provisions of this bill, the State would pay more than $13 per hour for qualified volunteers who volunteer for a 501(c)(3) organization, up to a maximum of $2,000 per year through a tax credit.
    
    Assuming that all returns are accepted as filed, there would be no additional administrative costs to the Tax Department associated with passage of this bill. Entities that qualify for exemption from federal income tax under Sec. 501(c)(3) of the Internal Revenue Code would likely have increased administrative expenses associated with passage of this bill.


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