Date Requested:January 31, 2011
Time Requested:01:44 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2235 Introduced SB345
CBD Subject: PROPERTY TAX RELIEF PROGRAM
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 simplify and consolidate senior citizen property tax relief programs, and make those programs available only to eligible “low income” homeowners.
    
    As written, this bill will convert four often confusing alternative property tax relief programs to a single program with two separate credits. One proposed revision to the Refundable Credit for Real Property Taxes Paid in Excess of Four Percent of Income is the establishment of an income threshold of 300 percent of the Federal Poverty Guideline to ensure that the benefits are directed toward “low income” households. Additionally, the bill provides that senior citizens and/or disabled homeowners with net Property Tax liability remaining after the initial credit program (i.e., Senior Citizen Tax Credit for Property Tax Paid), which is retained, may claim an additional refundable tax credit of up to $1,000 via the Refundable Credit for Real Property Taxes Paid in Excess of Four Percent of Income. Finally, the bill proposes to repeal the two Property Tax deferment programs. These programs require Taxpayers to apply for the programs through their County Assessor; however, surveys by the State Tax Department indicate that no claims have been made.
    
    According to our interpretation, the proposed changes are expected to be revenue neutral. The additional credit of up to $1,000 available for senior citizens and/or disabled homeowners from the Refundable Credit for Real Property Taxes Paid in Excess of Four Percent of Income is expected to be offset by the elimination of the program for higher income households.
    
    Additional administrative costs to the State Tax Department associated with this bill will be minimal. The elimination of the two Deferment programs will preclude any additional administrative costs for local governments.

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 0
3. Explanation of above estimates (including long-range effect):
    Passage of this bill will convert four often confusing alternative property tax relief programs to a single program with two separate credits. One proposed revision to the Refundable Credit for Real Property Taxes Paid in Excess of Four Percent of Income is the establishment of an income threshold of 300 percent of the Federal Poverty Guideline to ensure that the benefits are directed toward “low income” households. Additionally, the bill provides that senior citizens and/or disabled homeowners with net Property Tax liability remaining after the initial credit program (i.e., Senior Citizen Tax Credit for Property Tax Paid), which is retained, may claim an additional refundable tax credit of up to $1,000 via the Refundable Credit for Real Property Taxes Paid in Excess of Four Percent of Income. Finally, the bill proposes to repeal the two Property Tax deferment programs. These programs require Taxpayers to apply for the programs through their County Assessor; however, surveys by the State Tax Department indicate that no claims have been made.
    
    According to our interpretation, the proposed changes are expected to be revenue neutral. The additional credit of up to $1,000 available for senior citizens and/or disabled homeowners from the Refundable Credit for Real Property Taxes Paid in Excess of Four Percent of Income is expected to be offset by the elimination of the program for higher income households.
    
    Additional administrative costs to the State Tax Department associated with this bill will be minimal. The elimination of the two Deferment programs will preclude any additional administrative costs for local governments.
    


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