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 reduce the primary rate of tax on corporations 1/2% a year for 6 years so that the corporation net income tax rate will be 6% at the end of 6 years.
According to our interpretation, passage of this bill would result in a decline in the General Revenue Fund as shown in the table below.
General Revenue Fund
FY2006 ($4.3 million)
FY2007 ($11.1 million)
FY2008 ($18.0 million)
FY2009 ($24.9 million)
FY2010 ($31.9 million)
FY2011 ($37.6 million)
FY2012 ($40.9 million)
FY2013 ($42.9 million)
FY2014+ ($44.9 million)
Additional administrative costs to the Tax Department associated with this bill would be approximately $27,000 in Fiscal Year 2005 and approximately $16,000 per year in Fiscal Year 2006 through 2010.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2005
Increase/Decrease
(use"-") |
2006
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
27,000 |
16,000 |
16,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
27,000 |
16,000 |
16,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-4,300,000 |
-44,900,000 |
Explanation of above estimates (including long-range effect):
This bill would phase-in a reduction of the corporate net income tax rate from nine percent to six percent by reducing the rate by fifty one hundredths of one percent per year, commencing July 1, 2005.
According to our interpretation, passage of this bill would result in a decline in the General Revenue Fund as shown in the table below.
General Revenue Fund
FY2006 ($4.3 million)
FY2007 ($11.1 million)
FY2008 ($18.0 million)
FY2009 ($24.9 million)
FY2010 ($31.9 million)
FY2011 ($37.6 million)
FY2012 ($40.9 million)
FY2013 ($42.9 million)
FY2014+ ($44.9 million)
Additional administrative costs to the Tax Department associated with this bill would be for printing and mailing information material and revised returns to taxpayers and for modifying computer addressing and audit programs.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us