Date Requested:January 09, 2014
Time Requested:04:40 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2014R1336 Introduced SB274
CBD Subject: REINTRO2013-97CREDIT FOR GRADUATES
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 for a credit against West Virginia personal income tax liability in the amount of payments made on student loans.
    
     As written, this bill would provide a tax credit for taxpayers graduating from a qualified institution of higher learning on or after January 1, 2015. The tax credit would be applied in the year of graduation and the next succeeding nine tax years.
    
     Passage of this bill would result in a minor loss in revenue in FY2015 and a loss of $10 million to the General Revenue Fund in FY2016. The loss would expand each year until reaching $111 million upon full implementation in FY 2025.
    
     Additional administrative costs to the State Tax Department from the passage of this bill would be $50,000 in FY2016 and $35,000 each year thereafter.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 50,000
Personal Services 0 0 35,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 10,000
Other 0 0 5,000
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
     As written, this bill would provide a tax credit for taxpayers graduating from a qualified institution of higher learning on or after January 1, 2015. The tax credit would be applied in the year of graduation and the next succeeding nine tax years.
    
     Passage of this bill would result in a minor loss in revenue in FY2015 and a loss of $10 million to the General Revenue Fund in FY2016. The loss would expand each year until reaching $111 million upon full implementation in FY 2025.
    
     Additional administrative costs to the State Tax Department from the passage of this bill would be $50,000 in FY2016 and $35,000 each year thereafter. The additional costs include the hiring of additional personnel in anticipation of a large volume of taxpayers that would qualify for this credit.


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Gaurav.G.Patel@wv.gov
    The stated purpose of this bill is to provide for a credit against West Virginia personal income tax liability in the amount of payments made on student loans.
    
     The bill indicates that Internal Revenue Service Form 1098-E shall be used to provide the necessary information relating to the identity of the graduate claiming the credit and the qualified student loan interest amount. The information appearing on the referenced form only includes this information and does not include any information on the total payments made on student loans.
    
     Also, the proposed bill does not restrict the credit to graduates of West Virginia institutions of higher learning.