Date Requested: January 27, 2015
Time Requested: 04:16 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
1896 Introduced SB130
CBD Subject: Tax


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 apply the residential solar energy tax credit of up to $2,000 to each installation of a solar energy system. The bill extends the tax credit until July 1, 2022.
    
    According to our interpretation, this bill would retroactively extend the Residential Solar Energy Tax Credit until July 1, 2022. The prior program expired as of July 1, 2013. The credit is offered to any West Virginia resident who installs a solar energy system on property located in this state and owned by the taxpayer that is used as a residence after July 1, 2009. The State tax credit would be in addition to the 30% Federal Residential Renewable Energy Tax Credit. Based on current industry trends, passage of this bill would result in an estimated General Revenue fund loss of roughly $1 million in FY 2016 and $600,000 or more per year thereafter. The higher cost in the first year would be associated with the bill’s retroactive effective date of July 1, 2013. The credit is for the lesser of 30% or $2,000 of the costs to purchase and install the system. The bill’s proposal to allow the credit for “systems” and to allow a tax credit up to a maximum of $2,000 “for each installation” may result in tax credit claims for a single residence well in excess of the current $2,000 limit. The pre-incentive cost of a solar energy system for a typical home is more than $40,000.
    
    Additional administrative costs incurred by the State Tax Department would be minimal.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 5,000 0
Personal Services 0 0 0
Current Expenses 0 5,000 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -1,000,000 -600,000


Explanation of above estimates (including long-range effect):


    Passage of this bill would retroactively extend the Residential Solar Energy Tax Credit until July 1, 2022. The prior program expired as of July 1, 2013. The credit is offered to any West Virginia resident who installs a solar energy system on property located in this state and owned by the taxpayer that is used as a residence after July 1, 2009. The State tax credit would be in addition to the 30% Federal Residential Renewable Energy Tax Credit. Based on current industry trends, passage of this bill would result in an estimated General Revenue fund loss of roughly $1 million in FY 2016 and $600,000 or more per year thereafter. The higher cost in the first year would be associated with the bill’s retroactive effective date of July 1, 2013. The credit is for the lesser of 30% or $2,000 of the costs to purchase and install the system. The bill’s proposal to allow the credit for “systems” and to allow a tax credit up to a maximum of $2,000 “for each installation” may result in tax credit claims for a single residence well in excess of the current $2,000 limit. The pre-incentive cost of a solar energy system for a typical home is more than $40,000.
    
    Additional administrative costs incurred by the State Tax Department would be minimal.
    



Memorandum


    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov