FISCAL NOTE



FUND(S):

General Revenue Fund

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 tax credits to those people paying for qualified medical expenses, or health insurance, or both medical expenses and health insurance. As written, this bill would allow a credit against personal income tax liability of up to $2,500 for single filers and $5,000 for joint filers for medical care expenses, not reimbursed by an insurance company, or for the cost of health insurance paid by the taxpayer. As a result, the passage of this bill would result in a loss of roughly $750 million to $1 billion per year to the General Revenue Fund. There would be no additional administrative costs to the State Tax Department from the passage of this bill.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
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):


The stated purpose of this bill is to provide tax credits to those people paying for qualified medical expenses, or health insurance, or both medical expenses and health insurance. As written, this bill would allow a credit against personal income tax liability of up to $2,500 for single filers and $5,000 for joint filers for medical care expenses, not reimbursed by an insurance company, or for the cost of health insurance paid by the taxpayer. As a result, the passage of this bill would result in a loss of $750million to $1 billion per year to the General Revenue Fund. This estimate is based upon average health care expenses in the U.S. (including health insurance costs) by income level and average tax liabilities, by income level, for income tax filers in the State. There would be no additional administrative costs to the State Tax Department from the passage of this bill.



Memorandum


The stated purpose of this bill is to provide tax credits to those people paying for qualified medical expenses, or health insurance, or both medical expenses and health insurance. This bill is very broad in nature. There is no definition of “medical care expenses” or “expenses incurred for health insurance”. Also, there is no effective date in the bill.



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