Date Requested:February 07, 2011
Time Requested:04:53 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2441 Introduced SB449
CBD Subject: CREATING INNOVATION FREE TRADE ACT
FUND(S)
General Revenue Fund, local governments
Sources of Revenue
General Fund,Other Fund local property tax
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 enact the West Virginia Innovation Free Trade Act of 2011 consisting of the Twenty-First Century Business Technologies Property Valuation Act and the Twenty-First Century Tax Credit Act, the purpose of which is to encourage the development and use of emerging technologies to create good jobs and grow West Virginia’s economy.
    
    As written, this bill would create a tax credit for capital investment and development of the use in West Virginia of twenty-first century technologies and would set the valuation, for Property Tax purposes, of “twenty-first century business technology property” at 5 percent of the original cost. The bill indicates “twenty-first century business technologies” includes, but is not limited to, emerging technologies and other business technologies that primarily use state-of-the-art methodologies, practices or techniques to manufacture, produce or provide its primary goods or services. The tax credit would be available to new businesses or a new segment of a business primarily engaged in an emerging technology industry or is primarily utilizing twenty-first century business technologies. The amount of credit is based upon the amount of qualified investment and number of jobs created. Additionally, the bill provides criteria for the eligible new jobs, including the median compensation and benefits. Also, reports on the tax credit and Property Tax valuation are required.
    
    The State Tax Department does not have sufficient data to estimate the potential revenue impact of this proposed credit or the proposed Property Tax valuation.
    
    As written, the bill requires the State Tax Department to develop application forms, to review and approve applications for the credit and to prepare a periodic report on the credit. Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $50,000 per year. Also, county assessors and the Development Office may incur additional administrative costs attributable to passage of this bill.
    
    

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 50,000 50,000
Personal Services 0 50,000 50,000
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):
    As written, this bill would create a tax credit for capital investment and development of the use in West Virginia of twenty-first century technologies and would set the valuation, for Property Tax purposes, of “twenty-first century business technology property” at 5 percent of the original cost. The bill indicates “twenty-first century business technologies” includes, but is not limited to, emerging technologies and other business technologies that primarily use state-of-the-art methodologies, practices or techniques to manufacture, produce or provide its primary goods or services. The tax credit would be available to new businesses or a new segment of a business primarily engaged in an emerging technology industry or is primarily utilizing twenty-first century business technologies. The amount of credit is based upon the amount of qualified investment and number of jobs created. Additionally, the bill provides criteria for the eligible new jobs, including the median compensation and benefits. Also, reports on the tax credit and Property Tax valuation are required.
    
    The State Tax Department does not have sufficient data to estimate the potential revenue impact of this proposed credit or the proposed Property Tax valuation.
    
    As written, the bill requires the State Tax Department to develop application forms, to review and approve applications for the credit and to prepare a periodic report on the credit. Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $50,000 per year. Also, county assessors and the Development Office may incur additional administrative costs attributable to passage of this bill.
    


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