FISCAL NOTE
Date Requested: January 31, 2024
Time Requested: 11:42 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3069 |
Introduced |
HB5205 |
|
|---|
| CBD Subject: |
Governor -- Bills Requested By |
|---|
|
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 senior citizens’ tax credit for property tax paid, and to expand the eligibility requirements for the credit.
Based on our interpretation, the legislation would expand the income eligibility threshold for the senior citizen’s tax credit for property tax paid and increase the taxable assessed value on which the credit is based from the tax paid on the first $20,000 to the tax paid on the first $30,000 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, if passed, would apply retroactively to taxable years beginning after December 31, 2023.
According to our interpretation, the proposed legislation would decrease General Revenue fund collections by up to $8.5 million beginning in FY2025.
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 |
-8,500,000 |
-8,500,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the legislation would expand the income eligibility threshold for the senior citizen’s tax credit for property tax paid and increase the taxable assessed value on which the credit is based from the tax paid on the first $20,000 to the tax paid on the first $30,000 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, if passed, would apply retroactively to taxable years beginning after December 31, 2023.
According to our interpretation, the proposed legislation would decrease General Revenue fund collections by up to $8.5 million beginning in FY2025.
Additional administrative costs incurred by the State Tax Department would be $61,500 in FY2025 and $45,000 in subsequent fiscal years.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov