FISCAL NOTE
Date Requested: January 18, 2024
Time Requested: 04:53 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1876 |
Introduced |
HB4865 |
|
|---|
| CBD Subject: |
Senior Citizens; 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 to increase the total amount for the senior citizen homestead tax exemption and lower the threshold to 200% of the federal poverty guidelines.
Based on our interpretation, the legislation would increase the income eligibility threshold for the senior citizen’s tax credit for property tax paid on the first $20,000 of taxable assessed value of a homestead in this state. Under current W.Va. Code §11-21-21, a “low-income” person who is eligible for the homestead exemption is allowed a refundable personal income tax credit equal to the amount of ad valorem property taxes paid on up to $20,000 of taxable assessed value of the homestead. This bill would expand the definition of “low-income” person from those with federal adjusted gross income for the taxable year of up to 150 percent of the federal poverty guidelines to those with up to 200 percent.
The legislation also adds an annual limit of $25 million on the aggregate amount of credit available. The bill has no internal effective date. Per W.Va. Code §11-10-5p, since the bill has no internal effective date, the legislation, if passed, would become effective January 1, 2025.
According to our interpretation, the proposed legislation would decrease General Revenue fund collections by up to $3.6 million FY2026 and in subsequent years.
Additional administrative costs incurred by the State Tax Department would be $61,500 in FY2025 and $45,000 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 |
61,500 |
45,000 |
| Personal Services |
0 |
45,000 |
45,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,500 |
0 |
| Other |
0 |
15,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-3,600,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the legislation would increase the income eligibility threshold for the senior citizen’s tax credit for property tax paid on the first $20,000 of taxable assessed value of a homestead in this state. Under current W.Va. Code §11-21-21, a “low-income” person who is eligible for the homestead exemption is allowed a refundable personal income tax credit equal to the amount of ad valorem property taxes paid on up to $20,000 of taxable assessed value of the homestead. This bill would expand the definition of “low-income” person from those with federal adjusted gross income for the taxable year of up to 150 percent of the federal poverty guidelines to those with up to 200 percent.
The legislation also adds an annual limit of $25 million on the aggregate amount of credit available. The bill has no internal effective date. Per W.Va. Code §11-10-5p, since the bill has no internal effective date, the legislation, if passed, would become effective January 1, 2025.
According to our interpretation, the proposed legislation would decrease General Revenue fund collections by up to $3.6 million FY2026 and in subsequent years.
Additional administrative costs incurred by the State Tax Department would be $61,500 in FY2025 and $45,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to increase the total amount for the senior citizen homestead tax exemption and lower the threshold to 200% of the federal poverty guidelines.
The bill adds an annual limit of $25 million on the aggregate amount of credit available. Currently, there is no limit. This may lead to administrative difficulties, as the bill provides no guidance for determining eligibility if the total applications for the credit should exceed the limit for any tax year. The new limit is not mentioned in the bill’s title, which constitutes a title defect.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov