Date Requested:February 14, 2005
Time Requested:03:07 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005r110 intro hb2322
CBD Subject: volunteering to charitable organ deducti
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 create an income tax deduction for taxpayers who volunteer two hundred or more hours to a charitable organization. The bill also provides for the assessment of a civil fine for violations.
    
    According to our interpretation, a taxpayer would be permitted to claim a deduction against federal adjusted gross income for Personal Income Tax purposes. The deduction would be equal to the monetary value of volunteer services furnished if the taxpayer volunteers two hundred or more hours to a charitable organization as defined in Section 501(c)(3) of the Internal Revenue Code. The Tax Department does not have access to the data necessary to calculate the revenue impact of this proposal. The deduction would first apply to tax years beginning on or after January 1, 2005.
    
    Entities that qualify for exemption from federal income tax under Section 501(c)(3) of the Internal Revenue Code would likely have increased administrative expenses associated with passage of this bill due to the proposed record keeping and reporting requirements.
    
    The Tax Department would incur administrative costs of $32,000 in Fiscal Year 2006 and $21,000 per year for each fiscal year thereafter. The administrative costs would be for equipment and audit functions.

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 32,000 21,000
Personal Services 0 21,000 21,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 11,000 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    Passage of this bill would permit a taxpayer to claim a deduction against federal adjusted gross income for Personal Income Tax purposes. The deduction would be equal to the monetary value of volunteer services furnished if the taxpayer volunteers two hundred or more hours to a charitable organization as defined in Section 501(c)(3) of the Internal Revenue Code. The Tax Department does not have access to the data necessary to calculate the revenue impact of this proposal. The deduction would first apply to tax years beginning on or after January 1, 2005.
    
    Entities that qualify for exemption from federal income tax under Section 501(c)(3) of the Internal Revenue Code would likely have increased administrative expenses associated with passage of this bill due to the proposed record keeping and reporting requirements.
    
    The Tax Department would incur administrative costs of $32,000 in Fiscal Year 2006 and $21,000 per year for each fiscal year thereafter. The administrative costs would be for equipment and audit functions.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to create an income tax deduction for taxpayers who volunteer two hundred or more hours to a charitable organization. The bill also provides for the assessment of a civil fine for violations.
    
    As written, the bill does not specify if the 200 hours of volunteer time must be donated in a single year.