FISCAL NOTE
Date Requested: January 11, 2024
Time Requested: 09:15 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1578 |
Introduced |
HB4359 |
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| CBD Subject: |
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FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to exempt law-enforcement officers, who are members of a municipal paid police department, county sheriff’s office, or the State Police, from payment of income and personal property taxes.
The revenue impact of this proposal on Property Tax collections cannot be determined. We have no data on the type and value of personal property owned by law enforcement officers. However, the potential revenue loss to local governments would be significant.
We are also unable to estimate the revenue impact from the Personal Income Tax modification in this bill. We have little reliable data on the amount of income which would be received by eligible law enforcement officers. The bill does not state that the income must be from the taxpayer’s work as a law enforcement officer. The potential loss of the State General Revenue Fund would be significant.
Additional administrative costs incurred by the State Tax Department to administer the Personal Income Tax exemption would be $46,500 in FY2024 and $25,000 in subsequent fiscal years. Additional costs to the State Tax Department and local governments related to the Property Tax Exemption cannot be determined.
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 |
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 |
0 |
Explanation of above estimates (including long-range effect):
The revenue impact of this proposal on Property Tax collections cannot be determined. We have no data on the type and value of personal property owned by law enforcement officers. However, the potential revenue loss to local governments would be significant.
We are also unable to estimate the revenue impact from the Personal Income Tax modification in this bill. We have little reliable data on the amount of income which would be received by eligible law enforcement officers. The bill does not state that the income must be from the taxpayer’s work as a law enforcement officer. The potential loss of the State General Revenue Fund would be significant.
Additional administrative costs incurred by the State Tax Department to administer the Personal Income Tax exemption would be $46,500 in FY2024 and $25,000 in subsequent fiscal years. Additional costs to the State Tax Department and local governments related to the Property Tax Exemption cannot be determined.
Memorandum
The stated purpose of this bill is to exempt law-enforcement officers, who are members of a municipal paid police department, county sheriff’s office, or the State Police, from payment of income and personal property taxes.
There are constitutional issues with the Property Tax provisions in this bill. The West Virginia Constitution, Article X, Section 1, allows the Legislature to exempt property that is used for specifically enumerated purposes. The bill would create an exemption based solely on the ownership, rather than the use, of property. Furthermore, taxation is required to be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law.
The bill does not state that the income must be from the individual’s work as a law enforcement officer. Therefore, all income received by a law enforcement officer could be subject to this modification. The bill does not define law enforcement officer.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov