Sources of Revenue:

General Fund,Other Fund local property tax

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The stated purpose of this bill is to require assessors to verify with the Tax Commissioner that Class II property owners have filed a West Virginia Resident Income Tax Return indicating that the address of the property is the residential address of the owner or owners. The bill requires the Tax Commissioner to develop and implement a computerized system by which an assessor can confirm whether Class II property owners have filed a West Virginia Resident Income Tax Return indicating that the address of their property is their residential address. The bill also requires owners to justify the classification of their Class II property if their tax returns do not indicate that their address is the address of the property, and provides that the return is presumptive evidence that the subject property is owned, used and occupied by the owner exclusively for residential purposes or that farm property is occupied by the owners. According to our interpretation, passage of this bill may result in the reclassification of some property from Class II to classes with a higher tax rate (i.e., Class III or Class IV). However, the potential revenue increase that would result from the reclassification cannot be determined. Additional administrative costs for the State Tax Department associated with this bill would be significant. Also, County Assessors may incur additional administrative costs due to passage of this bill.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2008 Increase/Decrease (use"-")	2009 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):

Passage of this bill would require assessors to verify with the Tax Commissioner that Class II property owners have filed a West Virginia Resident Income Tax Return indicating that the address of the property is the residential address of the owner or owners. The bill requires the Tax Commissioner to develop and implement a computerized system by which an assessor can confirm whether Class II property owners have filed a West Virginia Resident Income Tax Return indicating that the address of their property is their residential address. The bill also requires owners to justify the classification of their Class II property if their tax returns do not indicate that their address is the address of the property, and provides that the return is presumptive evidence that the subject property is owned, used and occupied by the owner exclusively for residential purposes or that farm property is occupied by the owners. According to our interpretation, passage of this bill may result in the reclassification of some property from Class II to classes with a higher tax rate (i.e., Class III or Class IV). However, the potential revenue increase that would result from the reclassification cannot be determined. Additional administrative costs for the State Tax Department associated with this bill would be significant. Also, County Assessors may incur additional administrative costs due to passage of this bill.

Memorandum

The stated purpose of this bill is to require assessors to verify with the Tax Commissioner that Class II property owners have filed a West Virginia Resident Income Tax Return indicating that the address of the property is the residential address of the owner or owners. The bill requires the Tax Commissioner to develop and implement a computerized system by which an assessor can confirm whether Class II property owners have filed a West Virginia Resident Income Tax Return indicating that the address of their property is their residential address. The bill also requires owners to justify the classification of their Class II property if their tax returns do not indicate that their address is the address of the property, and provides that the return is presumptive evidence that the subject property is owned, used and occupied by the owner exclusively for residential purposes or that farm property is occupied by the owners. As written, it is not apparent if the ownership of more than one Class II property by a resident taxpayer or the ownership of a second home by an out-of-state resident will be permitted to retain a Class II designation.

Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us