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 authorize a tax deduction by teachers for out of pocket school supplies not to exceed $500. This bill provides a deceasing modification to an eligible teacher’s adjusted gross income of up to $500. Passage of this bill would result in a $200,000 reduction to the General Revenue Fund. There would be no additional administrative cost 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 -200,000 -200,000


Explanation of above estimates (including long-range effect):


This bill provides a deceasing modification to an eligible teacher’s adjusted gross income. It allows up to a $500 modification for out of pocket school supplies, “but only to the extent the amount is not allowable as a deduction when arriving at the taxpayer’s federal adjusted gross income for the taxable year in which the payment is made.” Eligible educators can deduct up to $250 of qualified expenses when calculating their federal adjusted gross income. Assuming that all of West Virginia’s 19,866 full-time, permanent, elementary and secondary school teachers have an extra $250 in qualified expenses remaining after taking the federal deduction, passage of this bill would result in a $200,000 reduction to the General Revenue Fund. There would be no additional administrative cost to the State Tax Department.



Memorandum


The stated purpose of this bill is to authorize a tax deduction by teachers for out of pocket school supplies not to exceed $500. This bill incorrectly designates a tax modification as a “deduction.” West Virginia does not have itemized deductions, and the language of the bill should be changed to replace “deduction” with “additional modification reducing the federal adjusted gross income.” Several terms are not defined, including “out of pocket,” “teacher,” and “school supplies.” The bill is also silent regarding the applicability of “carry forward” or “carry back” provisions.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov