FISCAL NOTE
Date Requested: February 03, 2016
Time Requested: 02:42 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2373 |
Introduced |
SB502 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
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 change the qualifier for low income to three hundred percent or less of the federal poverty guideline from one hundred fifty percent or less of the federal poverty guideline for a senior citizens’ homestead tax credit.
As written, this bill, would extend the Senior Citizens’ Tax Credit for Property Tax Paid on the first $20,000 of taxable assessed value of a homestead to taxpayers whose federal adjusted gross income is less than or equal to 300 percent of the federal poverty guideline based upon family size. Currently, the eligibility criterion is federal adjusted gross income of less than or equal to 150 percent of the federal poverty guideline. According to our interpretation, passage of this bill would result in an initial annual reduction in the General Revenue Fund of roughly $8 million to $10 million. The number of senior citizens in West Virginia is expected to continue to grow. The annual reduction in General Revenue Fund collections would grow with the increase in number of senior citizens.
Additional administrative costs to the State Tax Department attributable to passage of the bill would be roughly $16,000 in the next fiscal year.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
16,000 |
0 |
| Personal Services |
0 |
5,000 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
11,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
As written, this bill, would extend the Senior Citizens’ Tax Credit for Property Tax Paid on the first $20,000 of taxable assessed value of a homestead to taxpayers whose federal adjusted gross income is less than or equal to 300 percent of the federal poverty guideline based upon family size. Currently, the eligibility criterion is federal adjusted gross income of less than or equal to 150 percent of the federal poverty guideline. According to our interpretation, passage of this bill would result in an initial annual reduction in the General Revenue Fund of roughly $8 million to $10 million. The number of senior citizens in West Virginia is expected to continue to grow. The annual reduction in General Revenue Fund collections would grow with the increase in number of senior citizens.
Additional administrative costs to the State Tax Department attributable to passage of the bill would be roughly $16,000 in the next fiscal year.
Memorandum
The stated purpose of this bill is to change the qualifier for low income to three hundred percent or less of the federal poverty guideline from one hundred fifty percent or less of the federal poverty guideline for a senior citizens’ homestead tax credit.
The title fails to mention that the proposed bill changes a definition, which is a title defect. The title also fails to mention that changes to this tax credit would become effective for tax years after December 31, 2016.
The title is also confusing. The proposed bill does not change the homestead exemption from ad valorem property taxes.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov