FISCAL NOTE

Date Requested: March 13, 2017
Time Requested: 12:52 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
3082 Introduced HB2940
CBD Subject: Taxation


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 a tax credit for improving facades in historic districts. The bill provides that individuals and corporations are entitled to a twenty-five percent tax credit of the replacement cost of a historic façade. The bill sets forth conditions. According to our interpretation, this bill would provide a 25 percent tax credit of the replacement cost of a historic facade against Personal Income Tax liabilities and Corporation Net Income Tax liabilities for individuals and corporations. The façade replacement would need to complement the facades of the historic buildings within the historic district and not degrade the historic facades of the other buildings. The design and construction would need to be approved in advance by the county commission or municipality. We cannot estimate the revenue impact of this bill because we do not know how many eligible taxpayers would qualify for this credit. Additional administrative costs incurred by the State Tax Department would be $28,000 for FY2019 and $20,000 in fiscal years thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 28,000
Personal Services 0 0 10,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 18,000
2. Estimated Total Revenues 0 0 0


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


According to our interpretation, this bill would provide a 25 percent tax credit of the replacement cost of a historic facade against Personal Income Tax liabilities and Corporation Net Income Tax liabilities for individuals and corporations. The façade replacement would need to complement the facades of the historic buildings within the historic district and not degrade the historic facades of the other buildings. The design and construction would need to be approved in advance by the county commission or municipality. We cannot estimate the revenue impact of this bill because we do not know how many eligible taxpayers would qualify for this credit. Additional administrative costs incurred by the State Tax Department would be $28,000 for FY2019 and $20,000 in fiscal years thereafter.



Memorandum


The stated purpose of this bill is to create a tax credit for improving facades in historic districts. The bill provides that individuals and corporations are entitled to a twenty-five percent tax credit of the replacement cost of a historic façade. The bill sets forth conditions. The bill provides for certain conditions, but does not define terms such as “replacement costs” and “complement the facades of the historic buildings.” This bill does not set a dollar limit on the credit nor does not provide for carryforward or carryback of this credit. The proposed bill does not provide for a promulgation of rules by the Tax Commissioner who will administer the credit. The bill does not provide for guidelines for the county commission or municipality to use in evaluating a “design and construction plan.”



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