FISCAL NOTE
Date Requested: January 31, 2024
Time Requested: 10:53 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3251 |
Introduced |
HB5025 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
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 as follows: “This bill is being introduced at the request of the State Tax Division. The purpose of this bill is to eliminate the additional one and one-half percent interest rate for underpayments and specify an effective date.”
According to our interpretation, beginning in calendar year 2025, the additional one and one-half percent interest rate for tax underpayments would be eliminated. The current interest rate for tax underpayments is 13.0 percent. Nationally, the median state interest rate for tax underpayments is 9.50 percent. Removing the additional one and one-half percent interest rate for tax underpayments would reduce General Revenue Fund collections by nearly $0.8 million in FY2025 and $1.6 million per year in FY2026 and thereafter in comparison to current law.
Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2025.
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 |
10,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-800,000 |
-1,600,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, beginning in calendar year 2025, the additional one and one-half percent interest rate for tax underpayments would be eliminated. The current interest rate for tax underpayments is 13.0 percent. Nationally, the median state interest rate for tax underpayments is 9.50 percent. Removing the additional one and one-half percent interest rate for tax underpayments would reduce General Revenue Fund collections by nearly $0.8 million in FY2025 and $1.6 million per year in FY2026 and thereafter in comparison to current law.
Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2025.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov