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 and nine-tenths percent, effective January 1, 2012.
    
    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 January 1, 2012. 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.
    
    Additional administrative costs to the State Tax Department associated with this bill would be roughly $60,000 in both FY2012.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 60,000 0
Personal Services 0 0 0
Current Expenses 0 30,000 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 30,000 0
2. Estimated Total Revenues 0 -30,000,000 -60,000,000


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 January 1, 2012. 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.
    
    Additional administrative costs to the State Tax Department associated with this bill would be roughly $60,000 in both 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