Date Requested:January 20, 2011
Time Requested:03:26 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1469 Introduced HB2661
CBD Subject: REDUCE CORPORATE NET INCOME TAX
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 reduce the rate of tax on corporate net income to five point nine percent, effective the tax year beginning July 1, 2011.
    
    According to our interpretation, this bill would set the tax rate for the Corporation Net Income Tax at 5.9 percent for tax years beginning on or after July 1, 2011. Due to the wide fluctuation of taxable corporation income due to changing economic conditions, passage of this bill would likely reduce the General Revenue Fund by $30 million to $60 million per year.
    
    Due to the proposed change effective for tax years beginning on or after July 1, 2011, additional administrative costs to the State Tax Department associated with this bill would be roughly $30,000 in both FY2011 and FY2012.
    

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 30,000 30,000 0
Personal Services 0 0 0
Current Expenses 30,000 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 30,000 0
2. Estimated Total Revenues 0 -60,000,000 -60,000,000
3. Explanation of above estimates (including long-range effect):
    Passage of this bill would set the tax rate for the Corporation Net Income Tax at 5.9 percent for tax years beginning on or after July 1, 2011. Due to the wide fluctuation of taxable corporation income due to changing economic conditions, passage of this bill would likely reduce the General Revenue Fund by $30 million to $60 million per year.
    
    Due to the proposed change effective for tax years beginning on or after July 1, 2011, additional administrative costs to the State Tax Department associated with this bill would be roughly $30,000 in both FY2011 and FY2012. The additional costs would include mailing a notification to taxpayers of the tax rate change and the update of computer audit programs.
    


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