Sources of Revenue:

General Fund

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 provide a tax credit to taxpayers which do not satisfy the new jobs percentage requirement prescribed for the credit allowed under chapter eleven, article thirteen Q. As written, this bill would provide a tax credit of $3,000 per new job created for businesses who do not otherwise meet the minimum jobs creation criteria for the Economic Opportunity Tax Credit. Businesses engaged in manufacturing, information processing, warehousing, goods distribution (exclusive of retail trade), destination-oriented recreation and tourism, and research and development would be eligible for the credit proposed by this bill for each new job created where the new jobs are full-time jobs with benefits paying at least $32,000 per year. The $3,000 per new job credit would be available for a period of five consecutive years beginning in the tax year the new employee is first hired. The bill also provides that the new jobs credit may be taken in addition to other investment-based and/or expenditure-based tax credits. The State Tax Department is unable to estimate the potential revenue reduction that would result from passage of this bill. However, it is expected that the revenue consequences would be minimal. Additional administrative costs to the State Tax Department associated with this bill would be minimal.

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 provide a tax credit of $3,000 per new job created for businesses who do not otherwise meet the minimum jobs creation criteria for the Economic Opportunity Tax Credit. Businesses engaged in manufacturing, information processing, warehousing, goods distribution (exclusive of retail trade), destination-oriented recreation and tourism, and research and development would be eligible for the credit proposed by this bill for each new job created where the new jobs are full-time jobs with benefits paying at least $32,000 per year. The $3,000 per new job credit would be available for a period of five consecutive years beginning in the tax year the new employee is first hired. The bill also provides that the new jobs credit may be taken in addition to other investment-based and/or expenditure-based tax credits. The State Tax Department is unable to estimate the potential revenue reduction that would result from passage of this bill. However, it is expected that the revenue consequences would be minimal. Additional administrative costs to the State Tax Department associated with this bill would be minimal.

Memorandum

The stated purpose of this bill is to provide a tax credit to taxpayers which do not satisfy the new jobs percentage requirement prescribed for the credit allowed under chapter eleven, article thirteen Q. As written, this bill permits qualified taxpayers to claim the new jobs tax credit proposed by this bill in addition to other investment-based and/or expenditure-based tax credits. Generally, the currently available tax credits preclude the use of the same investment or expenditure for multiple tax credits. Passage of this bill may result in some manufacturers making an investment that would qualify for the Manufacturing Investment Tax Credit and that would also qualify for this tax credit, if any new jobs were created. Similar multiple credit occurrences may be available to companies making expenditures that qualify for the Strategic Research and Development Tax Credit and that create new jobs.

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