FISCAL NOTE
Date Requested: February 04, 2019 Time Requested: 12:59 PM |
Agency: |
Tax & Revenue Department, WV State |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
1768 |
Introduced |
HB2829 |
|
CBD Subject: |
|
---|
|
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 to provide new graduates of an in-state or out-of-state higher educational institution, an in-state community or technical college, or an in-state trade school, a $1,000 tax credit on the income tax of the graduate for five taxable years; providing rule-making authority to the Tax Commissioner; and removing expired language from this section.
According to our interpretation, the proposed bill would allow a tax credit of $1,000 for college graduates who complete a two-year, four-year, or post-graduate degree program. Qualifying students may receive up to three credits for completing qualifying degree programs, for a lifetime potential credit cap of $1,000, and may carryover unused credit for up to 5 years. The credit is nonrefundable and nontransferable. Based on our understanding, the proposed bill would result in a loss to General Revenues of roughly $9.1 million FY2021. The revenue loss would increase each year due to the addition of more graduates claiming the credit until it levels off at $45.5 million for the fifth year and beyond. Due to the lack of internal effective date, the provisions of this bill would first become effective as of the 2020 tax year.
Additional administrative costs incurred by the State Tax Department would be $106,000 in FY2020 and $77,000 per year for each year thereafter.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2019 Increase/Decrease (use"-") |
2020 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
14,700 |
0 |
0 |
Personal Services |
9,400 |
0 |
0 |
Current Expenses |
0 |
0 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
5,300 |
0 |
0 |
2. Estimated Total Revenues |
0 |
-1,100,000 |
-1,200,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the proposed bill would allow a tax credit of $1,000 for college graduates who complete a two-year, four-year, or post-graduate degree program. Qualifying students may receive up to three credits for completing qualifying degree programs, for a lifetime potential credit cap of $1,000, and may carryover unused credit for up to 5 years. The credit is nonrefundable and nontransferable. Based on our understanding, the proposed bill would result in a loss to General Revenues of roughly $9.1 million FY2021. The revenue loss would increase each year due to the addition of more graduates claiming the credit until it levels off at $45.5 million for the fifth year and beyond. Due to the lack of internal effective date, the provisions of this bill would first become effective as of the 2020 tax year.
Additional administrative costs incurred by the State Tax Department would be $106,000 in FY2020 and $77,000 per year for each year thereafter.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov