Date Requested:February 10, 2005
Time Requested:04:21 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005r536 intro hb2134
CBD Subject: private education tax credit
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
A New Program

Fiscal Note Summary

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

    The stated purpose of this bill is to provide a two-tiered personal income tax credit to parents or legal guardians who provide home or private primary or secondary education for their children. The tax credit will be effective upon the completion of a school year and available at a rate per child of $500 for home schooling and $1,000 for private schooling.
    
    Passage of this bill would result in a General Revenue Fund decline of approximately $17.8 million per year, beginning in FY2007. Due to the lack of an internal effective date, this bill would not become effective until the 2006 tax year.
    
    There would be no additional administrative costs to the State Tax Department.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
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 0 -17,800,000
3. Explanation of above estimates (including long-range effect):
    This bill would provide a tax credit to parents or guardians who enroll children in private schools or provide home schooling for their children. The tax credit would be $1,000 per child in private school and $500 per child in home school. State tax revenue would be reduced by approximately $17.8 million. There were 15,224 children enrolled in either a church school or private school during the 2003-2004 school year. There were an additional 5,100 children enrolled in a home school program. Due to lack of an internal effective date, this change would first occur in Tax Year 2006.
    
    If all returns are accepted as filed, there would be no additional administrative costs to the State Tax Department.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to provide a two-tiered personal income tax credit to parents or legal guardians who provide home or private primary or secondary education for their children. The tax credit will be effective upon the completion of a school year and available at a rate per child of $500 for home schooling and $1,000 for private schooling.
    
    There is no requirement that the parent or guardian is required to provide all of the expenses for the home or private schooling; all that is required is that the schooling be provided. In the case of divorced parents, each may assist in providing the required schooling and then each may be able to take the credit.