Date Requested:January 13, 2014
Time Requested:11:24 AM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2014R1618 Introduced SB328
CBD Subject: STRATEGIC RESEARCH AND DEVELOPMENT TAX CREDIT
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 repeal the Strategic Research and Development Tax Credit.
    
     As written, this bill would terminate the Strategic Research and Development Tax Credit for investment or expenditures made on or after January 1, 2014. Taxpayers who have gained entitlement to the Strategic Research and Development Tax Credit pursuant to qualified investment or expenditure prior to January 1, 2014 retain that entitlement and may apply the credit according to the requirements and limitations of the Strategic Research and Development Tax Credit statute.
    
     According to our interpretation, passage of this bill will reduce the costs of the Strategic Research and Development Tax Credit in FY2015 by $1 million with the cost savings increasing to $4 million per year by FY2018. The $1 million savings is included in the Governor’s official revenue estimates for FY2015. Failure to enact this bill will result in a $1 million decrease in the General Revenue fund from the official revenue estimates for FY2015.
    
     Passage of this bill will not result in any additional administrative costs to the State Tax Department.

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 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 1,000,000 4,000,000
3. Explanation of above estimates (including long-range effect):
    
     Passage of this bill would terminate the Strategic Research and Development Tax Credit for investment or expenditures made on or after January 1, 2014. Taxpayers who have gained entitlement to the Strategic Research and Development Tax Credit pursuant to qualified investment or expenditure prior to January 1, 2014 retain that entitlement and may apply the credit according to the requirements and limitations of the Strategic Research and Development Tax Credit statute.
    
     According to our interpretation, passage of this bill will reduce the costs of the Strategic Research and Development Tax Credit in FY2015 by $1 million with the cost savings increasing to $4 million per year by FY2018. The $1 million savings is included in the Governor’s official revenue estimates for FY2015. Failure to enact this bill will result in a $1 million decrease in the General Revenue fund from the official revenue estimates for FY2015.
    
     Passage of this bill will not result in any additional administrative costs to the State Tax Department.
    


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov