Date Requested:January 19, 2012
Time Requested:02:29 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2012R1104 Comm. Sub. SB40
CBD Subject: BUSINESSES THAT COMPOST
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 offer businesses a tax credit for composting certain types of garbage, landscape waste and food.
    
    As written, this bill would create a new tax credit of 50% of the cost of contracting with a commercial composting facility up to $2,000. The credit may be applied against the Business and Occupation Tax, Personal Income Tax, Business Franchise Tax, and Corporation Net Income Tax.
    
    According to our interpretation, the credit would be available to any business that contracts with a commercial compost facility. Information on composting facility costs and their availability is not readily available. Therefore, the Tax Department is unable to accurately estimate the impact of the credit.
    
    Assuming that all Business and Occupation Tax, Personal Income Tax, Business Franchise Tax, and Corporation Net Income Tax returns claiming the new credit would be accepted as filed, additional administrative costs for the State Tax Department would be minimal. However, if the State Tax Department is required to verify that a business complied with the credit requirements, additional administrative costs to the State Tax Department could be of some significance.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
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):
    As written, this bill would create a new tax credit of 50% of the cost of contracting with a commercial composting facility up to $2,000. The credit may be applied against the Business and Occupation Tax, Personal Income Tax, Business Franchise Tax, and Corporation Net Income Tax.
    
    According to our interpretation, the credit would be available to any business that contracts with a commercial compost facility. Information on composting facility costs and their availability is not readily available. Therefore, the Tax Department is unable to accurately estimate the impact of the credit.
    
    Assuming that all Business and Occupation Tax, Personal Income Tax, Business Franchise Tax, and Corporation Net Income Tax returns claiming the new credit would be accepted as filed, additional administrative costs for the State Tax Department would be minimal. However, if the State Tax Department is required to verify that a business complied with the credit requirements, additional administrative costs to the State Tax Department could be of some significance.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to businesses a tax credit for composting certain types of garbage, landscape waste and food.
    
    As written, this bill would create a credit of 50% of the cost of contracting with a commercial composting facility up to $2,000 available to any business that contracts with a commercial composting facility. However, the bill title is broader than the provisions of the bill. The bill title should specify that the credit is for the use of commercial composting facilities only. The bill provides for use of the tax credit against four separate taxes but fails to provide any guidance on use of the credit against these taxes, including guidance limiting total credit claims to no more than the amount available.