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 allow members of volunteer fire departments to deduct the taxes on personal income due for that tax year as an additional modification reducing the member’s federal adjusted gross income for state personal income tax purposes.
As written, this bill provides a credit for the first three years of active membership as a volunteer firefighter equal to the personal income taxes owed by the taxpayer. If the taxpayer continues to be an active member of a volunteer fire department for an additional five years, the tax credit shall be equal to fifty percent of the taxes due by the taxpayer for the next five years.
Due to the lack of available data, we are unable to accurately estimate the loss to the General Revenue Fund from the passage of this bill. However, the loss would be substantial due to the broad nature of the bill.
There would be no additional administrative costs to the Tax Department from the passage of this bill.
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 |
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 allow members of volunteer fire departments to deduct the taxes on personal income due for that tax year as an additional modification reducing the member’s federal adjusted gross income for state personal income tax purposes.
As written, this bill provides a credit for the first three years of active membership as a volunteer firefighter equal to the personal income taxes owed by the taxpayer. If the taxpayer continues to be an active member of a volunteer fire department for an additional five years, the tax credit shall be equal to fifty percent of the taxes due by the taxpayer for the next five years.
Due to the lack of available data, we are unable to accurately estimate the loss to the General Revenue Fund from the passage of this bill. However, the loss would be substantial due to the broad nature of the bill.
There would be no additional administrative costs to the Tax Department from the passage of this bill.
Memorandum
The stated purpose of this bill is to allow members of volunteer fire departments to deduct the taxes on personal income due for that tax year as an additional modification reducing the member’s federal adjusted gross income for state personal income tax purposes.
This bill proposes to offer a deduction or an additional modification reducing a taxpayer’s federal adjusted gross income (FAGI) as an active member of a volunteer fire department. However, in subsection (b), the bill begins discussing qualification for a tax credit. It is not clear if this is to be a credit in addition to the modification reducing FAGI, or if the credit is meant to be synonymous with the modification reducing FAGI.
The credit would equal the taxes owed on personal income in the first three years of service, and 50% of the taxes owed on personal income for the following five years. Since the credit applies to volunteer firefighters, the income discrepancy could be substantial As a result, the bill has constitutional concerns. The W.Va. Constitution requires that taxation be “equal and uniform throughout the state” (W.Va. Const. Art. X §1). Thus, a provision allowing one person a credit of potentially $100,000 or more while allowing another person a lesser credit is contradictory to the Constitutional requirement.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us