Date Requested:February 16, 2005
Time Requested:01:16 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R384 Intro HB2126
CBD Subject: Charitable Donation Income Deduction
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 permit deductions from federal adjusted gross income, for personal income tax purposes, for contributions to religious, educational or charitable organizations.
    
    According to our interpretation, passage of this bill would reduce General Revenue Fund collections by roughly $26.3 million per year beginning in Fiscal Year 2006-2007. This bill would create a decreasing modification to federal adjusted gross income for charitable contributions at a cost of roughly $26.3 million per year. Due to the lack of an internal effective date, this proposed modification would first become effective for tax years beginning on or after January 1, 2006.
    
    If all returns with modifications for charitable contributions are accepted as filed, there would be no additional administrative costs to the 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 -26,300,000
3. Explanation of above estimates (including long-range effect):
    This bill would create a decreasing modification to federal adjusted gross income for charitable contributions at a cost of roughly $26.3 million per year. Due to the lack of an internal effective date, this proposed modification would first become effective for tax years beginning on or after January 1, 2006. More than 70 percent of all Americans make charitable contributions.
    
    If all returns with modifications for charitable contributions are accepted as filed, there would be no additional administrative costs to the Tax Department.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us