Date Requested:February 06, 2014
Time Requested:01:10 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2014R1923 Introduced HB4419
CBD Subject: TAX CREDIT FOR TRUST FOR AUTISTIC CHILD
FUND(S)
General Revenue Fund, West Virginia Children with Autism Trust Fund, West Virginia Children with Autism Trust Fund Program Administrative Account
Sources of Revenue
General Fund,Other Fund West Virginia Children wi
Legislation creates:
A New Program,A New Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

     The stated purpose of this bill is to create a tax credit for parents and guardians of autistic children contributing to a qualified trust fund against their personal income tax obligations, and to create the West Virginia Children with Autism Trust Fund.
    
     As written, this bill would replace an existing decreasing modification for purposes of the Personal Income Tax with a tax credit. Currently, contributions to a qualified trust fund reduce a Taxpayer’s taxable income up to a maximum of $1,000, while the bill’s proposal would allow contributions to a qualified trust fund to offset tax otherwise due up to a maximum of $2,000.
    
     The bill also replaces the current statute (i.e., W. Va. Code §44-16 et seq.) for Trusts for Children with Autism with a new article entitled Parent or Guardian Trusts for Children with Autism. The new article creates a Trustee Advisory Board and places oversight of the trust program with the State Treasurer.
    
     The State Tax Department does not have sufficient information on the number of qualified trust funds that would be created or the amount of contributions that would be made to such accounts. Thus, we are unable to accurately estimate the potential revenue impact of the tax credit proposed by this bill.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $50,000 in FY2016 and roughly $35,000 each year thereafter. The State Treasurer and the newly created Trustee Advisory Board may also incur additional administrative costs attributable to passage of this bill.

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 5,000
Other 0 0 10,000
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
     Passage of this bill would replace an existing decreasing modification for purposes of the Personal Income Tax with a tax credit. Currently, contributions to a qualified trust fund reduce a Taxpayer’s taxable income up to a maximum of $1,000, while the bill’s proposal would allow contributions to a qualified trust fund to offset tax otherwise due up to a maximum of $2,000.
    
     The bill also replaces the current statute (i.e., W. Va. Code §44-16 et seq.) for Trusts for Children with Autism with a new article entitled Parent or Guardian Trusts for Children with Autism. The new article creates a Trustee Advisory Board and places oversight of the trust program with the State Treasurer.
    
     The State Tax Department does not have sufficient information on the number of qualified trust funds that would be created or the amount of contributions that would be made to such accounts. Thus, we are unable to accurately estimate the potential revenue impact of the tax credit proposed by this bill. A West Virginia Department of Education report for the 2012-2013 school year showed, 1,619 students with autism. An annual $2,000 tax credit for each of the identified students would reduce the State General Revenue Fund by more than $3.2 million per year.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $50,000 in FY2016 and roughly $35,000 each year thereafter. The additional costs would include the hiring of an additional employee to review claims of the proposed tax credit. The State Treasurer and the newly created Trustee Advisory Board may also incur additional administrative costs attributable to passage of this bill.


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov
     The stated purpose of this bill is to create a tax credit for parents and guardians of autistic children contributing to a qualified trust fund against their personal income tax obligations, and to create the West Virginia Children with Autism Trust Fund.
    
     As written, this bill would replace an existing decreasing modification for purposes of the Personal Income Tax with a tax credit. The bill proposes that the tax credit would be effective for taxable years beginning after December 31, 2014. However, it is unclear if the current decreasing modification would be available for all of tax year 2014, or just up to the enactment date of the bill.