Date Requested:January 13, 2011
Time Requested:03:30 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1380 Introduced HB2148
CBD Subject: CREDIT FOR SCHOLARSHIP DONATION
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 a tax credit for scholarship donations.
    
    The proposed bill states that a dollar for dollar tax credit will be given for donations to scholarship programs, and there are no restrictions to cap the donation or credit. The proposed bill would effectively create a mechanism for the State to fund donations for educational purposes and may result in an increase in scholarship donations. Other charitable organizations, such as religion, the arts, environment, etc., may see a drop in donations because scholarship donations would become more tax-preferred.
    
    Passage of this bill would result in a loss to the General Revenue Fund of roughly $57 million per year. Nearly 13 percent of West Virginians who make charitable contributions donate their funds towards education. This percentage could rise if education donations become more tax-preferred.
    
    Additional administrative cost to the State Tax Department associated with passage of this bill would be minimal.
    

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 -57,000,000
3. Explanation of above estimates (including long-range effect):
    The proposed bill states that a dollar for dollar tax credit will be given for donations to scholarship programs, and there are no restrictions to cap the donation or credit. The proposed bill would effectively create a mechanism for the State to fund donations for educational purposes and may result in an increase in scholarship donations. Other charitable organizations, such as religion, the arts, environment, etc., may see a drop in donations because scholarship donations would become more tax-preferred.
    
    Passage of this bill would result in a loss to the General Revenue Fund of roughly $57 million per year. Nearly 13 percent of West Virginians who make charitable contributions donate their funds towards education. This percentage could rise if education donations become more tax-preferred.
    
    Additional administrative cost to the State Tax Department associated with passage of this bill would be minimal.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to provide a tax credit for scholarship donations.
    
    The proposed bill creates a credit against State Personal Income Tax for “donations to scholarship programs”, each dollar donated matched by one dollar in credit. The phrase “scholarship programs” is not defined and no mechanism for determining the amount a taxpayer pays into such a program is provided.