Date Requested:January 12, 2011
Time Requested:04:43 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1071 Introduced HB2296
CBD Subject: DEDUCTIONS FOR GIFTS TO WV CHARITIES
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 deductions from federal adjusted gross income, for personal income tax purposes, for contributions to religious, educational or charitable organizations.
    
    According to our interpretation, passage of this bill would reduce General Revenue Fund collections by roughly $35.2 million per year beginning in Fiscal Year 2013. This bill would create a decreasing modification to federal adjusted gross income for charitable contributions. Due to the lack of an internal effective date, this proposed modification would first become effective for tax years beginning on or after January 1, 2012.
    
    If all returns with modifications for charitable contributions are accepted as filed, there would be no additional administrative costs to the State Tax Department.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
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 -35,200,000
3. Explanation of above estimates (including long-range effect):
    This bill would create a decreasing modification to federal adjusted gross income for charitable contributions at a cost of roughly $35.2 million per year. Due to the lack of an internal effective date, this proposed modification would first become effective for tax years beginning on or after January 1, 2012. More than 70 percent of all Americans make charitable contributions.
    
    If all returns with modifications for charitable contributions are accepted as filed, there would be no additional administrative costs to the State Tax Department.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The purpose of this bill is to permit deductions from federal adjusted gross income, for personal income tax purposes, for contributions to religious, educational or charitable organization.
    
    The entity receiving gifts is to be “West Virginia entity operated solely for religious, educational or charitable purposes,” without reference to I.R.C § 501 (c)(3) or defining “West Virginia entity”properly, the proposed subdivision invites misuse or litigations. Also, proposed bill lacks internal effective date.