FISCAL NOTE
Date Requested: January 25, 2024
Time Requested: 04:03 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1331 |
Introduced |
|
SJR5 |
|---|
| CBD Subject: |
Constitutional Amendments |
|---|
|
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 propose an amendment to the State Constitution that would provide for a Homestead Exemption for Veterans with 100 percent service-connected disabilities.
Under current law, veterans who have a 90 percent or greater combined disability rating are eligible for an income tax credit for the amount they paid on property tax for their residence beginning in 2024. This income tax credit is anticipated to result in an income tax reduction to the General Revenue Fund of up to $8.4 million per year.
The current bill provides a total exemption from Property Tax on the residence of a veteran with a 100 percent disability rating. This would result in a loss of revenue from Property Taxes for the State, county commissions, county school boards and municipalities and a corresponding increase in Personal Income Tax revenue to the General Revenue Fund. Since the veteran with 100 percent disability would not pay Property Tax on their residence, their Personal Income Tax credit would drop to $0 shifting the tax loss from the State to local governments. We are unable to precisely determine the actual revenue shift because the current credit is for veterans with a 90 percent disability rating. and the proposed exemption is for veterans with a 100 percent disability rating.
Additional administrative costs cannot be readily 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):
Under current law, veterans who have a 90 percent or greater combined disability rating are eligible for an income tax credit for the amount they paid on property tax for their residence beginning in 2024. This income tax credit is anticipated to result in an income tax reduction to the General Revenue Fund of up to $8.4 million per year.
The current bill provides a total exemption from Property Tax on the residence of a veteran with a 100 percent disability rating. This would result in a loss of revenue from Property Taxes for the State, county commissions, county school boards and municipalities and a corresponding increase in Personal Income Tax revenue to the General Revenue Fund. Since the veteran with 100 percent disability would not pay Property Tax on their residence, their Personal Income Tax credit would drop to $0 shifting the tax loss from the State to local governments. We are unable to precisely determine the actual revenue shift because the current credit is for veterans with a 90 percent disability rating. and the proposed exemption is for veterans with a 100 percent disability rating.
Additional administrative costs cannot be readily determined.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov