Date Requested:March 25, 2013
Time Requested:01:37 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R2940 Introduced SB632
CBD Subject: EMERGENCY GENERATORS
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 provide tax credits for use of emergency generators with mobile unit hookups by businesses with a minimum of fifty locations in this state
    
     As written, the bill would provide a tax credit to any business Taxpayer with a minimum of 50 locations in West Virginia who installs or causes to be installed an emergency generator with a mobile unit hookup on property located in West Virginia and owned by the Taxpayer or used as a place of business. The credit would be effective for qualifying generators installed after July 1, 2013. The amount of the tax credit would be equal to 60 percent of the cost to purchase and install the system, up to a maximum of $15,000, and would be applied against the Personal Income Tax, Business Franchise Tax, or Corporation Net Income Tax liability of the Taxpayer with provisions that tax credit in excess of the Taxpayer’s liability may be carried over to succeeding tax years. The bill also specifies that a Taxpayer may claim the tax credit for no more than two emergency generators in each county in which the businesses are located.
    
     According to our interpretation and based upon available information, passage of this bill will result in a reduction in the General Revenue Fund of between $0.5 million and $1.5 million per year.
    
     Under the assumption that the State Tax Department would not be expected to evaluate the effectiveness of this proposed tax credit program, additional administrative costs to the State Tax Department associated with passage of this bill would be minimal.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2013
Increase/Decrease
(use"-")
2014
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, the bill would provide a tax credit to any business Taxpayer with a minimum of 50 locations in West Virginia who installs or causes to be installed an emergency generator with a mobile unit hookup on property located in West Virginia and owned by the Taxpayer or used as a place of business. The credit would be effective for qualifying generators installed after July 1, 2013. The amount of the tax credit would be equal to 60 percent of the cost to purchase and install the system, up to a maximum of $15,000, and would be applied against the Personal Income Tax, Business Franchise Tax, or Corporation Net Income Tax liability of the Taxpayer with provisions that tax credit in excess of the Taxpayer’s liability may be carried over to succeeding tax years. The bill also specifies that a Taxpayer may claim the tax credit for no more than two emergency generators in each county in which the businesses are located.
    
     According to our interpretation and based upon available information, passage of this bill will result in a reduction in the General Revenue Fund of between $0.5 million and $1.5 million per year. Based upon current business registration data, there are 17 Taxpayers who have more than 50 business locations in West Virginia.
    
     Under the assumption that the State Tax Department would not be expected to evaluate the effectiveness of this proposed tax credit program, additional administrative costs to the State Tax Department associated with passage of this bill would be minimal.


Memorandum
Person submitting Fiscal Note:
Roger D. Cox
Email Address:
Roger.D.Cox@wv.gov
     The stated purpose of this bill is to provide tax credits for use of emergency generators with mobile unit hookups by businesses with a minimum of fifty locations in this state
    
     The title describes “use of emergency generators” whereas the remainder of the bill refers primarily to “installation” of the generators and may be a defect in the title.
    
     The bill uses the terms “emergency generators,” “mobile unit hookups,” “system,” and “recapture of the credit” without providing definitions. As written, the bill provides that the “emergency generator” is to be installed with an undefined “mobile hookup” which infers a temporary, movable operation, but also requires that the generator be “wired to the electrical panel” in the building which sounds more permanent. This may lead to some confusion regarding what type of installation qualifies for the tax credit.