Date Requested:January 24, 2014
Time Requested:02:37 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2014R1798 Introduced HB4314
CBD Subject: $500.00 CREDIT FOR STATE INCOME TAXES
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 allow members of volunteer fire departments and rescue squads who have successfully completed required training and are covered by worker’s compensation a credit of $500 from their state personal income tax.
    
     The proposed bill states that any of the fire-fighters who have successfully completed minimum required training and are covered by worker’s compensation for a taxable year will be entitled to a $500 credit against his or her personal income tax for that tax year. Passage of this bill would result in a loss to the General Revenue Fund of roughly $4.2 million per year beginning in FY2016. Due to the lack of an internal effective date, this bill would not become effective until the 2015 tax year.
    
     Additional administrative costs to the State Tax Department would be roughly $50,000 in FY2016 and roughly $40,000 per year 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 0
Current Expenses 0 0 50,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 -4,200,000
3. Explanation of above estimates (including long-range effect):
     The stated purpose of this bill is to allow members of volunteer fire departments and rescue squads who have successfully completed required training and are covered by worker’s compensation a credit of $500 from their state personal income tax.
    
     The proposed bill states that any of the fire-fighters who have successfully completed minimum required training and are covered by worker’s compensation for a taxable year will be entitled to a $500 credit against his or her personal income tax for that tax year. Passage of this bill would result in a loss to the General Revenue Fund of roughly $4.2 million per year beginning in FY2016. Due to the lack of an internal effective date, this bill would not become effective until the 2015 tax year. According to available information, roughly 8,400 volunteer firefighters have the training credentials that would qualify them for the proposed tax credit.
    
     Additional administrative costs to the State Tax Department would be roughly $50,000 in FY2016 and roughly $40,000 per year each year thereafter.
    


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov
     The stated purpose of this bill is to allow members of volunteer fire departments and rescue squads who have successfully completed required training and are covered by worker’s compensation a credit of $500 from their state personal income tax.
    
     Minimum training requirements must be met according to the West Virginia University fire extension service firefighting training, section one, "or its equivalent." No indication is given as to how "equivalent" training is to be assessed. "Other training" required by the State Fire Commission is also made a qualifying condition to be eligible for the credit. No parameters are provided for the "other training" and may give rise to ambiguity in administrating the credit.
    
     The local fire department must pay workers' compensation on the member during "a given year." The bill does not provide any guidance on whether the payments must be made for an entire year, or whether payments made for a part of a year would qualify the member. Additionally, the bill requires that the member must be on "active status," verified by the president and chief of the volunteer fire department or president and captain of the volunteer rescue squad. No guidance is provided as to how "active status" is achieved. And, it is not clear when "active status" must be reached in order to qualify for the credit.