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 reduce the rate of tax on corporate net income to five point nine percent, effective the tax year beginning July 1, 2009.
According to our interpretation, this bill would set the tax rate for the Corporation Net Income Tax at 5.9 percent for tax years beginning on or after July 1, 2009. Due to the wide fluctuation of taxable corporation income due to changing economic conditions, passage of this bill would likely reduce the General Revenue Fund by $40 million to $60 million per year.
Additional administrative costs to the State Tax Department associated with this bill would total roughly $25,000.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2009 Increase/Decrease (use"-") |
2010 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
0 |
25,000 |
0 |
Personal Services |
0 |
0 |
0 |
Current Expenses |
0 |
14,000 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
0 |
11,000 |
0 |
2. Estimated Total Revenues |
0 |
-60,000,000 |
-60,000,000 |
Explanation of above estimates (including long-range effect):
Passage of this bill would set the tax rate for the Corporation Net Income Tax at 5.9 percent for tax years beginning on or after July 1, 2009. Due to the wide fluctuation of taxable corporation income due to changing economic conditions, passage of this bill would likely reduce the General Revenue Fund by $40 million to $60 million per year.
Additional administrative costs to the State Tax Department associated with this bill would total roughly $25,000. The additional costs would include mailing a notification to taxpayers of the tax rate change and the update of computer audit programs.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us