FISCAL NOTE
Date Requested: January 15, 2024
Time Requested: 04:01 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1360 |
Introduced |
HB4701 |
|
|---|
| CBD Subject: |
|
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FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to establish the “Stay in State” tax credit that allows residents of this state who remain in state after graduating with an undergraduate or associate degree from a state institution to be granted a tax credit for the total cost of tuition and interest for student loans used to obtain their degree. The bill provides this tax credit is against personal income tax in West Virginia and is awarded over a 10-year period. The bill provides that employers are also allowed to claim the credit for employees that qualify for the credit. The bill provides that in-state high schools, colleges, and universities are required to inform and assist students with obtaining the tax credit.
According to our interpretation, this bill would allow a Personal Income Tax credit for student loan payments made by graduates who work in West Virginia. In addition, a credit is allowed for employers who make loan payments for their employees. The State Tax Department does not have sufficient information to accurately estimate the amount of credits or decreasing modifications that would be taken for student loan payments. We are unable to accurately estimate the revenue loss to the General Revenue Fund attributable to passage of this bill, but the loss would be substantial.
Administrative costs to the State Tax Division would be $123,000 in FY2025 and $95,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
123,000 |
95,000 |
| Personal Services |
0 |
90,000 |
90,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
3,000 |
0 |
| Other |
0 |
30,000 |
5,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, this bill would allow a Personal Income Tax credit for student loan payments made by graduates who work in West Virginia. In addition, a credit is allowed for employers who make loan payments for their employees. The State Tax Department does not have sufficient information to accurately estimate the amount of credits or decreasing modifications that would be taken for student loan payments. We are unable to accurately estimate the revenue loss to the General Revenue Fund attributable to passage of this bill, but the loss would be substantial.
Administrative costs to the State Tax Division would be $123,000 in FY2025 and $95,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to establish the “Stay in State” tax credit that allows residents of this state who remain in state after graduating with an undergraduate or associate degree from a state institution to be granted a tax credit for the total cost of tuition and interest for student loans used to obtain their degree. The bill provides this tax credit is against personal income tax in West Virginia and is awarded over a 10-year period. The bill provides that employers are also allowed to claim the credit for employees that qualify for the credit. The bill provides that in-state high schools, colleges, and universities are required to inform and assist students with obtaining the tax credit.
The bill contains no effective date. The plethora of dates for qualification in the bill are ambiguous. The bill is not clear if the credit is only allowed for persons who graduated after some certain date, regardless of when they began their course of study, or is only allowed for persons who commenced their course of study after a certain date.
The distinction made in the bill between STEM graduates and graduates in all other academic programs raises a question of fundamental fairness and may run afoul of the State Constitution’s mandate that “taxation shall be equal and uniform.”
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov