FISCAL NOTE
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 creating a tax credit for certain businesses that locate within a twenty mile radius of a Hatfield-McCoy recreation area trail head. The bill establishes variable amounts of the credit. The bill provides that the credit lasts for ten years. The bill defines a term. The bill provides rule-making authority.
As written, any new business located within a twenty-mile radius of a trail head center associated with the Hatfield-McCoy recreation area that is engaged in providing goods or services used primarily for the benefit of visitors to and users of the recreation area would be allowed a tax credit to be applied against the Corporation Net Income Tax. The bill provides that the credit is “Effective for taxable years beginning July 1, 2014 ...” and would be available for “a period of ten years from the date the business becomes subject to this article [W. Va. Code §11-24].” The amount of tax credit available to each qualifying business would range from $10,000 to $35,000, depending upon the number of new full-time employees of the business.
The State Tax Department does not have sufficient information to accurately estimate how many new businesses would become eligible for the proposed tax credit. Thus, we are unable to estimate the potential revenue impact attributable to passage of this bill.
Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $50,000 in FY2015, and roughly $35,000 each year thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2014
Increase/Decrease
(use"-") |
2015
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
50,000 |
35,000 |
| Personal Services |
0 |
35,000 |
35,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
10,000 |
0 |
| Other |
0 |
5,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
As written, any new business located within a twenty-mile radius of a trail head center associated with the Hatfield-McCoy recreation area that is engaged in providing goods or services used primarily for the benefit of visitors to and users of the recreation area would be allowed a tax credit to be applied against the Corporation Net Income Tax. The bill provides that the credit is “Effective for taxable years beginning July 1, 2014 ...” and would be available for “a period of ten years from the date the business becomes subject to this article [W. Va. Code §11-24].” The amount of tax credit available to each qualifying business would range from $10,000 to $35,000, depending upon the number of new full-time employees of the business.
The State Tax Department does not have sufficient information to accurately estimate how many new businesses would become eligible for the proposed tax credit. Thus, we are unable to estimate the potential revenue impact attributable to passage of this bill.
Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $50,000 in FY2015, and roughly $35,000 each year thereafter.
Memorandum
The stated purpose of this bill is to creating a tax credit for certain businesses that locate within a twenty mile radius of a Hatfield-McCoy recreation area trail head. The bill establishes variable amounts of the credit. The bill provides that the credit lasts for ten years. The bill defines a term. The bill provides rule-making authority.
As written, this bill would create a new tax credit with a number of conditions and parameters. However, the bill does not provide adequate definitions for the terms used in the bill. Absent clear definitions of the terms used in the specification of the tax credit, administration of the tax credit would become more difficult and significantly increase administrative costs.
The bill provides that the proposed tax credit “Effective for taxable years beginning July 1, 2014 ...” This would appear to limit the tax credit to only those tax years that actually begin on July 1, 2014. Also, the bill proposes the new tax credit as a new section within the Corporation Net Income Tax Statute, which may limit the tax credit to only those businesses that are subject to the Corporation Net Income Tax.
Person submitting Fiscal Note: Mark B. Muchow
Email Address: Roger.D.Cox@wv.gov