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 change the qualifier for low income to three hundred percent or less of the federal poverty guideline from one hundred fifty percent or less of the federal poverty guideline for a senior citizens’ homestead tax credit.
As written, this bill, would extend the Senior Citizens’ Tax Credit for Property Tax Paid on the first $20,000 of taxable assessed value of a homestead to taxpayers whose federal adjusted gross income is less than or equal to 300 percent of the federal poverty guideline based upon family size. Currently, the eligibility criterion is federal adjusted gross income of less than or equal to 150 percent of the federal poverty guideline. According to our interpretation, passage of this bill would result in an initial annual reduction in the General Revenue Fund of roughly $7 million to $9 million. The number of senior citizens in West Virginia is expected to continue to grow. The annual reduction in General Revenue Fund collections would grow with the increase in number of senior citizens.
Additional administrative costs to the State Tax Department attributable to passage of the bill would be roughly $35,000 in the first year and roughly $30,000 each year thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2014
Increase/Decrease
(use"-") |
2015
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
35,000 |
30,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
30,000 |
30,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
5,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
As written, this bill, would extend the Senior Citizens’ Tax Credit for Property Tax Paid on the first $20,000 of taxable assessed value of a homestead to taxpayers whose federal adjusted gross income is less than or equal to 300 percent of the federal poverty guideline based upon family size. Currently, the eligibility criterion is federal adjusted gross income of less than or equal to 150 percent of the federal poverty guideline. According to our interpretation, passage of this bill would result in an initial annual reduction in the General Revenue Fund of roughly $7 million to $9 million. The number of senior citizens in West Virginia is expected to continue to grow. The annual reduction in General Revenue Fund collections would grow with the increase in number of senior citizens.
The change in the definition of low income for purposes of the Senior Citizen Tax Credit for Property Tax Paid to federal adjusted gross income that is 300 percent or less of the federal Poverty Guideline would increase the number of credit claimants from roughly 55,000 to roughly 97,000.
Additional administrative costs to the State Tax Department attributable to passage of the bill would be roughly $35,000 in the first year and roughly $30,000 each year thereafter. In the first year, additional costs would be incurred for computer programming changes and increased postage for mailing information to additional potential qualifiers for the tax credit. In subsequent years, the costs would be for increased postage.
Memorandum
The stated purpose of this bill is to change the qualifier for low income to three hundred percent or less of the federal poverty guideline from one hundred fifty percent or less of the federal poverty guideline for a senior citizens’ homestead tax credit.
The stated purpose refers to a “senior citizens’ homestead tax credit” while the West Virginia Code to be amended refers to the credit as the “Senior citizens’ tax credit for property tax paid on . . . a homestead. ”The proposed addition appears to alter the character of the subdivision in which the proposed language was added from a definition to a qualification. Also, the proposed revision includes the phrase “Beginning on or after July 1, 2014 . . . ” Generally, the periods for the annual federal poverty guidelines and the Personal Income Tax filing year are based upon a year beginning the first of January. Thus, the proposed changes could be subject to different interpretation than intended.
Person submitting Fiscal Note: Mark B. Muchow
Email Address: Roger.D.Cox@wv.gov