Date Requested:January 13, 2011
Time Requested:01:54 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1227 Introduced HB2009
CBD Subject: INDIGENT DENTAL CARE
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 purpose of the bill is to provide a tax incentive to dental practitioners to perform dental services at no cost to indigent patients as defined.
    
    This bill creates a decreasing modification to federal adjusted gross income for Personal Income Tax filers (or to federal taxable income for Corporation Net Income Tax filers), of up to $15,000 of the defined dollar value of any dental services provided to indigent patients at no cost. As written, this bill defines indigent patient “as a West Virginia resident whose income is one hundred fifty percent or more below the federal poverty level, and who has no insurance coverage for dental care.” It is our interpretation that in order to qualify as indigent, as specified in the bill, a person would only qualify if they had negative income in excess of $5,000 (i.e., poverty level income less 150 percent of poverty level income). Additionally, the bill specifies that the proposed modification is for tax years beginning “after January 1, 2011.”
    
    Assuming that the bill would be amended to define an indigent patient as “a West Virginia resident whose income is no greater than one hundred fifty percent of the federal poverty guideline for the number of individuals in the family unit” and to apply the modification to tax years beginning “on or after January 1, 2011", passage of this bill would reduce General Revenue Fund collections by approximately $300,000 per year beginning in Fiscal Year 2012.

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 -300,000 -300,000
3. Explanation of above estimates (including long-range effect):
    This bill creates a decreasing modification to federal adjusted gross income for Personal Income Tax filers (or to federal taxable income for Corporation Net Income Tax filers), of up to $15,000 of the defined dollar value of any dental services provided to indigent patients at no cost.
    
    There are 849 active, licensed West Virginia dentists and approximately 35% or 297 participate in free clinic programs. The estimated average federal adjusted gross income for WV dentists is $180,000. If 297 dentists claim the full $15,000 modification on their Personal Income Tax or Corporation Net Income Tax for the tax year beginning on January 1, 2011 there would be an annual $300,000 reduction in taxes collected and attributed to the General Revenue Fund.
    
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The purpose of the bill is to provide a tax incentive to dental practitioners to perform dental services at no cost to indigent patients as defined.
    
    As written, this bill defines indigent patient “as West Virginia resident whose income is one hundred fifty percent or more below the federal poverty level, and who has no insurance coverage for dental care.” Since this would appear to only apply to person with negative income, the proposed bill may not have intended impact. Additionally, the bill specifies that the proposed modification is for tax year beginning “after January 01, 2011.” Since nearly all Personal Income Tax filers and most Corporation Net Income Tax filers use a tax year that begins on January 1, the effect of the bill, as written, may be delayed beyond the intended effective date.