FISCAL NOTE
Date Requested: February 12, 2025
Time Requested: 08:06 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2158 |
Introduced |
HB2135 |
|
|---|
| 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.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The stated purpose of this bill is to create an incentive for employers to hire people who are pursuing a formal program of recovery from substance abuse issues by allowing the employer to claim a tax credit for employing eligible individuals, with limits based upon the employer’s total number of employees overall. The bill provides for recapture. Finally, the bill provides for an effective date.
According to our interpretation, the proposed bill provides nonrefundable Personal Income Tax and Corporation Net Income Tax Credits for eligible taxpayers who hire qualified individuals participating in a program of substance abuse recovery. A certified employer may claim a credit each year for up to seven eligible employees, depending on the total number of employees in the business entity. A business with 10 or fewer employees may claim a credit for one person, while a business employing more than 200 employees may claim a credit for up to seven qualified employees. The maximum credit allowed would be $2,000 per eligible individual hired and retained in employment. A study from the Recovery Research Institute revealed that roughly 22.3 million Americans - or nine percent of adults - are in recovery from some form of substance use disorder. The Tax Department cannot accurately estimate the number of eligible businesses that would qualify for this tax credit nor the amount of tax credit claimed in any given year due to the confidentiality of data on people in programs of substance abuse recovery.
Additional administrative costs incurred by the State Tax Division would be $51,150 in FY2026 and $27,500 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
51,150 |
27,500 |
| Personal Services |
0 |
27,500 |
27,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
0 |
22,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
According to our interpretation, the proposed bill provides nonrefundable Personal Income Tax and Corporation Net Income Tax Credits for eligible taxpayers who hire qualified individuals participating in a program of substance abuse recovery. A certified employer may claim a credit each year for up to seven eligible employees, depending on the total number of employees in the business entity. A business with 10 or fewer employees may claim a credit for one person, while a business employing more than 200 employees may claim a credit for up to seven qualified employees. The maximum credit allowed would be $2,000 per eligible individual hired and retained in employment. A study from the Recovery Research Institute revealed that roughly 22.3 million Americans - or nine percent of adults - are in recovery from some form of substance use disorder. The Tax Department cannot accurately estimate the number of eligible businesses that would qualify for this tax credit nor the amount of tax credit claimed in any given year due to the confidentiality of data on people in programs of substance abuse recovery.
Additional administrative costs incurred by the State Tax Division would be $51,150 in FY2026 and $27,500 in subsequent fiscal years.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
The stated purpose of this bill is to create an incentive for employers to hire people who are pursuing a formal program of recovery from substance abuse issues by allowing the employer to claim a tax credit for employing eligible individuals, with limits based upon the employer’s total number of employees overall. The bill provides for recapture. Finally, the bill provides for an effective date.
The bill does not specify how the credit is to be claimed in instances where there is more than one eligible taxpayer for the business though it says that “only one eligible taxpayer/employer may claim the credit at his or her respective business.”
Person submitting Fiscal Note: Mark Muchow
Email Address: radfiscal@wv.gov