Date Requested: February 24, 2015
Time Requested: 01:41 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
3126 Introduced HB2903
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 provide a tax credit for first time home buyers. The bill establishes eligibility criteria and sets a maximum credit of $5,000.
    
    According to our interpretation and based on available data, a Personal Income Tax credit for first-time home buyers of up to $5,000 would result in a revenue loss of roughly $36.0 million a year, beginning in FY2017.
    
    Additional administrative costs to the State Tax Department would be $45,500 in FY2017 and $30,000 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 0 30,000
Personal Services 0 0 30,000
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 -36,000,000


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


    According to our interpretation and based on available data, a Personal Income Tax credit for first-time home buyers of up to $5,000 would result in a revenue loss of roughly $36.0 million a year, beginning in FY2017.
    
    Additional administrative costs to the State Tax Department would be $45,500 in FY2017 and $30,000 in subsequent years due to review of proof of “first time home buyer”.



Memorandum


    The stated purpose of this bill is to provide a tax credit for first time home buyers. The bill establishes eligibility criteria and sets a maximum credit of $5,000.
    
    It seems that rules will need to be promulgated in order to administer this proposal, and no provisions for rule making are made in the bill. In addition, “principal residence” is not defined.
    



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