Date Requested:January 14, 2010
Time Requested:05:33 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2010R1168 Introduced SB172
CBD Subject: Earned Income Tax Credit
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 provide an earned income tax credit from the state personal income tax for taxpayers with qualifying children. The earned income tax credit is equal to twenty percent of the federal credit.
    
    As written, the bill proposes a new non-refundable credit that is equal to 20 percent of the earned income credit allowed under Section 32 of the federal Internal Revenue Code, and applicable to a qualifying Taxpayer’s Personal Income Tax liability, as reduced by other available tax credits. It is our interpretation that passage of this bill would reduce revenues by roughly $18 million in FY2011 and by roughly $16.8 million per year thereafter. The larger reduction in FY2011 is attributable to the temporary increase in the federal Earned Income Tax Credit for tax years 2009 and 2010 resulting from passage of the American Recovery and Reinvestment Act of 2009.
    
    There would be no additional administrative costs to the State Tax Department associated with passage of this bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2010
Increase/Decrease
(use"-")
2011
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 -18,000,000 -16,800,000
3. Explanation of above estimates (including long-range effect):
    As written, this bill would create a new non-refundable credit that is equal to 20 percent of the earned income credit allowed under Section 32 of the federal Internal Revenue Code, and applicable to a qualifying Taxpayer’s Personal Income Tax liability, as reduced by other available tax credits. It is our interpretation that passage of this bill would reduce revenues by roughly $18 million in FY2011 and by roughly $16.8 million per year thereafter. The larger reduction in FY2011 is attributable to the temporary increase in the federal Earned Income Tax Credit for tax years 2009 and 2010 resulting from passage of the American Recovery and Reinvestment Act of 2009.
    
    There would be no additional administrative costs to the State Tax Department associated with passage of this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is provided an earned income tax credit from the state personal income tax for taxpayers with qualifying children. The earned income tax credit is equal to twenty percent of the federal credit.
    
    As written, this bill fails to define certain key terms.