Date Requested:January 14, 2011
Time Requested:03:11 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1362 Introduced HB2493
CBD Subject: HISTORIC REHABILITATED BUILDINGS CREDIT
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 increase the amounts allowed as tax credits for qualified rehabilitated buildings investment.
    
    As written, this bill would increase the available qualified rehabilitated buildings tax credit from 10 percent of qualified rehabilitation expenditures to 25 percent of such expenditures. The credit is available for both residential and nonresidential buildings located in West Virginia and can be applied against Personal Income Tax or Corporation Net Income Tax, whichever is applicable. According to our interpretation and based upon recent credit claims and an assumption that the proposed change would apply to tax years beginning after passage of the bill, the increase in the credit percentage will result in an annual reduction in the General Revenue Fund of roughly $2.2 million. The revenue reduction may grow with increased utilization of the tax credit.
    
    There would be no additional administrative costs to the State Tax Department associated with passage of this bill. The Division of Culture and History may incur additional administrative costs if passage of the bill increases applications for the tax credit.
    

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 -2,200,000
3. Explanation of above estimates (including long-range effect):
    Passage of this bill would increase the available qualified rehabilitated buildings tax credit from 10 percent of qualified rehabilitation expenditures to 25 percent of such expenditures. The credit is available for both residential and nonresidential buildings located in West Virginia and can be applied against Personal Income Tax or Corporation Net Income Tax, whichever is applicable. According to our interpretation and based upon recent credit claims and an assumption that the proposed change would apply to tax years beginning after passage of the bill, the increase in the credit percentage will result in an annual reduction in the General Revenue Fund of roughly $2.2 million. The revenue reduction may grow with increased utilization of the tax credit.
    
    There would be no additional administrative costs to the State Tax Department associated with passage of this bill. The Division of Culture and History may incur additional administrative costs if passage of the bill increases applications for the tax credit.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to increase the amounts allowed as tax credits for qualified rehabilitated buildings investment.
    
    The changes proposed by his bill were not accompanied by language indicating the intended effective date of the change. Thus, the effective date could be subject to a broad interpretation, including a possible retroactive implementation.