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 a federal adjusted gross income deduction for the amount spent for medical expenses.
Due to the broad nature of this bill, we are unable to accurately estimate the loss in personal income tax revenue to the General Revenue Fund. The bill states in purposed W. Va. Code §11-21-12h “...there shall be an authorized allowable federal adjusted gross income deduction for sums spent for reasonable and necessary medical expenses...”. The bill does not define the amount that may be claimed as a decreasing modification.
Additional administrative costs to the Tax Department would be minimal during the current fiscal year due to notifying taxpayers of the new exemption. Thereafter, there would be no additional administrative costs to the Department.
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):
Due to the broad nature of this bill, we are unable to accurately estimate the loss in personal income tax revenue to the General Revenue Fund. The bill states in purposed W. Va. Code §11-21-12h “...there shall be an authorized allowable federal adjusted gross income deduction for sums spent for reasonable and necessary medical expenses...”. The bill does not define the amount that may be claimed as a decreasing modification.
Additional administrative costs to the Tax Department would be minimal during the current fiscal year due to notifying taxpayers of the new exemption. Thereafter, there would be no additional administrative costs to the Department.
Memorandum
The stated purpose of this bill is to allow a federal adjusted gross income deduction for the amount spent for medical expenses.
The bill uses the phrase “reasonable and necessary medical expenses” without definition. There seems to be no limit to the sums that can be claimed as a decreasing modification. Also, it is unclear whether a person that is using a pre-tax medical spending account can use the amount spent as a decreasing modification, effectively getting double credit. It is also unclear how the sums to be used as a decreasing modification will be verified.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us