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 provide an exemption on state personal income tax to members of volunteer fire departments who meet certain qualified service requirements.
As written, this bill provides for a reduction in Personal Income Tax liability for any member of a volunteer fire department based upon years of “qualified service”, after having met the requirements of a performance-based point system. Due to the lack of available data, we are unable to estimate the revenue loss associated with the specific years of service listed in the bill and the performance-based point system. However, based upon the maximum reduction of $500 per member, the passage of this bill could reduce General Revenue Fund collections by as much as $5.8 million per year beginning in Fiscal Year 2011-2012. Absent an internal effective date, the provisions of this bill would become effective for the 2011 tax year.
If all returns are accepted as filed, there would be a minimal increase in administrative costs to the State Tax Department.
Fiscal Note Detail
| 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 |
0 |
-5,800,000 |
Explanation of above estimates (including long-range effect):
As written, this bill provides for a reduction in Personal Income Tax liability for any member of a volunteer fire department based upon years of “qualified service”, after having met the requirements of a performance-based point system. Due to the lack of available data, we are unable to estimate the revenue loss associated with the specific years of service listed in the bill and the performance-based point system. However, based upon the maximum reduction of $500 per member, the passage of this bill could reduce General Revenue Fund collections by as much as $5.8 million per year beginning in Fiscal Year 2011-2012. Absent an internal effective date, the provisions of this bill would become effective for the 2011 tax year.
If all returns are accepted as filed, there would be a minimal increase in administrative costs to the State Tax Department.
Memorandum
The stated purpose of this bill is to provide an exemption on state personal income tax to members of volunteer fire departments who meet certain qualified service requirements.
This bill makes reference to years of “qualified service” for eligibility, but there is no definition of “qualified service” and it is not clear how this reconciles with meeting the requirements of a “performance-based point system”. The bill provides that there will be a $100 reduction after 1 year of service, a $250 reduction after 3 years of service and a $500 reduction after 5 years of service. It is uncertain whether or not there is any reduction in the intervening or subsequent years (i.e., years 2, 4, 6 and beyond).
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov