Date Requested: February 05, 2015
Time Requested: 04:47 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
1118 Introduced HB2629
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 create tax credits for small business economic impact in order to assist and encourage the growth of small business owners in the State of West Virginia, as well as promoting job growth from within this state by hiring residents of the state, for those tax years beginning on or after January 1, 2015 through December 2017.
    
    The proposed bill allows a tax credit against the Personal Income Tax and Corporation Net Income Tax for any taxpayer who conducts business entirely within West Virginia and hires less than 50 employees. The tax credit is equal to up to $2,500 for each new employee hired between January 1, 2015 and December 2017. The State Tax Department does not have sufficient information to accurately estimate how many businesses would become eligible for the proposed tax credit. Thus, we are unable to estimate the potential revenue impact attributable to passage of this bill.
    
    Additional administrative costs would be $30,000 in FY2016 and $20,000 in subsequent years.
    
    



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 30,000 20,000
Personal Services 0 20,000 20,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 10,000 0
2. Estimated Total Revenues 0 0 0


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


    The proposed bill allows a tax credit against the Personal Income Tax and Corporation Net Income Tax for any taxpayer who conducts business entirely within West Virginia and hires less than 50 employees. The tax credit is equal to up to $2,500 for each new employee hired between January 1, 2015 and December 2017. The amount of the tax credit would not exceed 50 percent of the actual wages paid in the tax year for the new employee. If any tax credit amount remains after application of the credit in a given tax year, that amount is forfeited. The State Tax Department does not have sufficient information to accurately estimate how many businesses would become eligible for the proposed tax credit. Thus, we are unable to estimate the potential revenue impact attributable to passage of this bill.
    
    Additional administrative costs would be $30,000 in FY2016 and $20,000 in subsequent years.
    



Memorandum


    The stated purpose of this bill is to create tax credits for small business economic impact in order to assist and encourage the growth of small business owners in the State of West Virginia, as well as promoting job growth from within this state by hiring residents of the state, for those tax years beginning on or after January 1, 2015 through December 2017.
    
    If passed, the bill may face constitutional challenges because of the imposed restrictions to apply only to businesses operating exclusively in West Virginia. The privileges and immunities clause states citizens of each state are entitled to all the privileges and immunities of other states. The dormant commerce clause prohibits states from passing legislation that improperly burdens or discriminates against interstate commerce.
    
    
    



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