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 allow a credit against state personal income tax for the purchase of a new wood or pellet stove, as well as a credit for the purchase of wood pellets within the State of West Virginia.
According to our interpretation, passage of this bill would result in a decrease of less than $100,000 per year to the General Revenue Fund.
Also, taxpayers will be able to claim a federal energy efficiency tax credit under The American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009. Under this Act, taxpayers may take a 30% credit (up to $1,500) for the purchase of a biomass stove with a thermal efficiency rating of at least 75%. To qualify for the credit, the purchase must be made in 2009 and 2010. Biomass-burning stoves include wood and pellet burning stoves.
The State Tax Department would incur no additional administrative costs associated with 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 |
-100,000 |
-100,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, passage of this bill would result in a decrease of less than $100,000 per year to the General Revenue Fund. The wood or pellet stove industry sales are uniquely tied to the larger energy industry. As prices for home heating oil rise, wood or pellet stove sales rise and as oil prices fall so do the sales of the wood or pellet stoves. This creates a volatile market where sales can see extreme fluctuations up or down year to year.
Also, taxpayers will be able to claim a federal energy efficiency tax credit under The American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009. Under this Act, taxpayers may take a 30% credit (up to $1,500) for the purchase of a biomass stove with a thermal efficiency rating of at least 75%. To qualify for the credit, the purchase must be made in 2009 and 2010. Biomass-burning stoves include wood and pellet burning stoves.
The State Tax Department would incur no additional administrative costs associated with passage of this bill.
Memorandum
The stated purpose of this bill is to allow a credit against state personal income tax for the purchase of a new wood or pellet stove, as well as a credit for the purchase of wood pellets within the State of West Virginia.
The proposed bill does not define the term “residential dwelling” which could encompass numerous buildings.
Also, the bill may violate the Interstate Commerce Clause of the United States Constitution in that it discriminates against out-of-state produce retailers of wood pellets.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us