FISCAL NOTE



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 authorize a tax credit for new firefighters in critical needs areas. It requires the State Fire Commission to determine standards defining “critical needs areas” in both specializations and geographic areas. The proposed bill states that any new firefighter, for the first three years of employment in the critical needs areas, may take a tax credit equal to the taxes on personal income due for the tax year. If the taxpayer continues to be employed by a fire department in a critical needs area for an additional five years, the tax credit shall equal fifty percent of the taxes due by that taxpayer for the next five years. The loss of revenue to the State cannot be determined until the “critical needs areas” are defined. Assuming that all Personal Income tax returns claiming the credit would be accepted as filed, additional administrative costs for the State Tax Department would be minimal. The State Fire Commission may also incur additional administrative costs associated with this bill.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2008
Increase/Decrease
(use"-")
2009
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


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


The stated purpose of this bill is to authorize a tax credit for new firefighters in critical needs areas. It requires the State Fire Commission to determine standards defining “critical needs areas” in both specializations and geographic areas. The State Tax Department does not have sufficient data to estimate the revenue loss to the State due to passage of this bill until the “critical needs areas” are defined. Assuming that all Personal Income tax returns claiming the credit would be accepted as filed, additional administrative costs for the State Tax Department would be minimal. The State Fire Commission may also incur additional administrative costs associated with this bill.



Memorandum


The stated purpose of this bill is to authorize a tax credit for new firefighters in critical needs areas. It requires the State Fire Commission to determine standards defining “critical needs areas” in both specializations and geographic areas. The proposed bill has several concerns. First, the bill uses terms “firefighter”and “new firefighter” without a clear definition. Second, the proposed bill does not state explicitly that the credit is restricted to only firefighters who are paid for their work as firefighters nor is the proposed tax credit limited solely to the tax attributable to the firefighter’s income as a firefighter. Lastly, the proposed bill requires the State Fire Commission to define the phrase “critical needs areas” but does not provide any guidelines and/or restrictions on the Commission in providing such a definition.



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