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 permit individual taxpayers a modification to state income tax for medical expenses exceeding two percent of their federal adjusted gross income.
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. As written, this bill would allow a decreasing modification for health care expenses in excess of two percent of federal adjusted gross income, not including amounts reimbursed by an employer. However, there is no definition of “health care expenses” and no limitation on the amount that may be claimed as the modification.
There would be no additional administrative costs to the State 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 permit individual taxpayers a modification to state income tax for medical expenses exceeding two percent of their federal adjusted gross income.
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. As written, this bill would allow a decreasing modification for health care expenses in excess of two percent of federal adjusted gross income, not including amounts reimbursed by an employer. However, there is no definition of “health care expenses” and no limitation on the amount that may be claimed as the modification. Based upon recent Consumer Expenditure Survey data, the average consumer unit spends $3,000 per year on health care, an amount equal to 5.7 percent of total consumer spending. A decreasing modification for health care expenditures in excess of 2 percent of income would result in a significant loss of State Personal Income Tax revenue.
There would be no additional administrative costs to the State Tax Department from the passage of this bill.
Memorandum
The stated purpose of this bill is to permit individual taxpayers a modification to state income tax for medical expenses exceeding two percent of their federal adjusted gross income.
There is no definition of “health care expenses”.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us