Sources of Revenue:

General Fund

Legislation creates:

A New Program

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The purpose of this bill is to establish a contiguous county transponder discount program for certain noncommercial commuters on West Virginia toll roads and to revise the tax modifications available to commuters participating in certain West Virginia Parkways Economic Development and Tourism Authority programs. As written, this bill would terminate the current Personal Income Tax decreasing modifications related to tolls paid through the West Virginia Parkways Economic Development and Tourism Authority Parkway Authority Commuter (PAC) card as of December 31, 2009 and create a new decreasing modification for tax years beginning on or after January 1, 2010. The new modification would permit taxpayers to reduce their Federal adjusted gross income, for purposes of the Personal Income Tax, for tolls paid electronically through the West Virginia Parkways Economic Development and Tourism Authority Parkway Authority Commuter (PAC) card and for tolls paid electronically through a new Contiguous County Transponder Account. The modification cannot exceed $1,500 per taxpayer per year; however, any amount of qualified toll payments in excess of the allowable per year modification may be carried forward for up to three tax years. The proposed bill also requires the West Virginia Parkways Economic Development and Tourism Authority to create the Contiguous County Transponder Account program for noncommercial commuters who are residents of Fayette, Greenbrier, Kanawha, McDowell, Mercer, Monroe, Raleigh, Summers, and Wyoming counties. The State Tax Department does not have access to the information necessary to accurately estimate the potential revenue impact of this bill. However, based upon preliminary information from the current modification, implementation of the modification, as proposed in the bill, may increase costs by roughly $25,000 per year. The additional costs would initially lower revenue for the General Revenue Fund, but be subsequently reimbursed by the West Virginia Parkways Economic Development and Tourism Authority. Assuming that all Personal Income Tax returns with the specified credits would be accepted as filed, additional administrative costs to the State Tax Department associated with this bill would be minimal. However, any requirement to verify the credit would result in significant additional administrative costs. The West Virginia Parkways Economic Development and Tourism Authority would likely incur additional administrative costs due to passage of this bill.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	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):

As written, this bill would terminate the current Personal Income Tax decreasing modifications related to tolls paid through the West Virginia Parkways Economic Development and Tourism Authority Parkway Authority Commuter (PAC) card as of December 31, 2009 and create a new decreasing modification for tax years beginning on or after January 1, 2010. The new modification would permit taxpayers to reduce their Federal adjusted gross income, for purposes of the Personal Income Tax, for tolls paid electronically through the West Virginia Parkways Economic Development and Tourism Authority Parkway Authority Commuter (PAC) card and for tolls paid electronically through a new Contiguous County Transponder Account. The modification cannot exceed $1,500 per taxpayer per year; however, any amount of qualified toll payments in excess of the allowable per year modification may be carried forward for up to three tax years. The proposed bill also requires the West Virginia Parkways Economic Development and Tourism Authority to create the Contiguous County Transponder Account program for noncommercial commuters who are residents of Fayette, Greenbrier, Kanawha, McDowell, Mercer, Monroe, Raleigh, Summers, and Wyoming counties. The State Tax Department does not have access to the information necessary to accurately estimate the potential revenue impact of this bill. However, based upon preliminary information from the current modification, implementation of the modification, as proposed in the bill, may increase costs by roughly $25,000 per year. The additional costs would initially lower revenue for the General Revenue Fund, but be subsequently reimbursed by the West Virginia Parkways Economic Development and Tourism Authority. Based upon preliminary information, over 2,000 tax year 2007 Personal Income Tax returns reported the decreasing modification that this bill would repeal. It is expected that the additional electronic toll payment program proposed by this bill would result in a higher usage of the decreasing modification. Assuming that all Personal Income Tax returns with the specified credits would be accepted as filed, additional administrative costs to the State Tax Department associated with this bill would be minimal. However, any requirement to verify the credit would result in significant additional administrative costs. The West Virginia Parkways Economic Development and Tourism Authority would likely incur additional administrative costs due to passage of this bill.

Memorandum

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