Supplement: WV HB4027 | 2022 | Regular Session | Tax & Revenue Department, WV State
For additional supplements on West Virginia HB4027 please see the Bill Drafting List
Bill Title: Relating to increasing the limit on value of agricultural products under the Farm-To-Food Bank Tax Credit
Status: 2022-02-09 - To House Finance [HB4027 Detail]
Download: West_Virginia-2022-HB4027-Tax_Revenue_Department_WV_State.html
The stated purpose of this bill is to raise the limit on the Farm-to-Food Bank Tax Credit from $2,500 to $5,000 and provide that the credit apply retroactively to January 1, 2022. According to our interpretation, the proposed bill would modify the West Virginia Farm to Food Bank Tax Credit, which became effective for donations occurring after December 31, 2017. Current Law allows a credit of 30 percent of the value of donated agricultural products by farmers, not to exceed $2,500 during a taxable year or the Personal Income Tax or Corporation Net Income Tax liability of the taxpayer, whichever is less. Total cap of credit allowances per year is $200,000. The proposed bill would increase the credit limitation to $5,000 and would be applied retroactively to any donation of qualifying edible agricultural products to one or more nonprofit food programs in the State made on or after January 1, 2022. Based on our understanding, passage of this bill would result in a minimal decrease in revenue beginning in FY2023. Taxpayer participation in this program to date has been minimal. Farmers already receive a federal and state deduction for such donated agricultural products on federal Schedule F. However, farmers tend to generate little or no net income from Schedule F. The current tax credit generally offsets income taxes generated by farmers attributable to activities outside of farming. Only 1.9 percent of all income tax returns filed in West Virginia are filed by farmers each year. Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2023.
According to our interpretation, the proposed bill would modify the West Virginia Farm to Food Bank Tax Credit, which became effective for donations occurring after December 31, 2017. Current Law allows a credit of 30 percent of the value of donated agricultural products by farmers, not to exceed $2,500 during a taxable year or the Personal Income Tax or Corporation Net Income Tax liability of the taxpayer, whichever is less. Total cap of credit allowances per year is $200,000. The proposed bill would increase the credit limitation to $5,000 and would be applied retroactively to any donation of qualifying edible agricultural products to one or more nonprofit food programs in the State made on or after January 1, 2022. Based on our understanding, passage of this bill would result in a minimal decrease in revenue beginning in FY2023. Taxpayer participation in this program to date has been minimal. Farmers already receive a federal and state deduction for such donated agricultural products on federal Schedule F. However, farmers tend to generate little or no net income from Schedule F. The current tax credit generally offsets income taxes generated by farmers attributable to activities outside of farming. Only 1.9 percent of all income tax returns filed in West Virginia are filed by farmers each year. Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2023.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov
Bill Title: Relating to increasing the limit on value of agricultural products under the Farm-To-Food Bank Tax Credit
Status: 2022-02-09 - To House Finance [HB4027 Detail]
Download: West_Virginia-2022-HB4027-Tax_Revenue_Department_WV_State.html
FISCAL NOTE
| Date Requested: January 12, 2022 Time Requested: 02:45 PM |
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FUND(S):
General Revenue FundSources of Revenue:
General FundLegislation creates:
Decreases Existing Revenue, Increases Existing ExpensesFiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to raise the limit on the Farm-to-Food Bank Tax Credit from $2,500 to $5,000 and provide that the credit apply retroactively to January 1, 2022. According to our interpretation, the proposed bill would modify the West Virginia Farm to Food Bank Tax Credit, which became effective for donations occurring after December 31, 2017. Current Law allows a credit of 30 percent of the value of donated agricultural products by farmers, not to exceed $2,500 during a taxable year or the Personal Income Tax or Corporation Net Income Tax liability of the taxpayer, whichever is less. Total cap of credit allowances per year is $200,000. The proposed bill would increase the credit limitation to $5,000 and would be applied retroactively to any donation of qualifying edible agricultural products to one or more nonprofit food programs in the State made on or after January 1, 2022. Based on our understanding, passage of this bill would result in a minimal decrease in revenue beginning in FY2023. Taxpayer participation in this program to date has been minimal. Farmers already receive a federal and state deduction for such donated agricultural products on federal Schedule F. However, farmers tend to generate little or no net income from Schedule F. The current tax credit generally offsets income taxes generated by farmers attributable to activities outside of farming. Only 1.9 percent of all income tax returns filed in West Virginia are filed by farmers each year. Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2023.
Fiscal Note Detail
| Effect of Proposal | Fiscal Year | ||
|---|---|---|---|
| 2022 Increase/Decrease (use"-") |
2023 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) | |
| 1. Estmated Total Cost | 0 | 10,000 | 0 |
| Personal Services | 0 | 0 | 0 |
| 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):
According to our interpretation, the proposed bill would modify the West Virginia Farm to Food Bank Tax Credit, which became effective for donations occurring after December 31, 2017. Current Law allows a credit of 30 percent of the value of donated agricultural products by farmers, not to exceed $2,500 during a taxable year or the Personal Income Tax or Corporation Net Income Tax liability of the taxpayer, whichever is less. Total cap of credit allowances per year is $200,000. The proposed bill would increase the credit limitation to $5,000 and would be applied retroactively to any donation of qualifying edible agricultural products to one or more nonprofit food programs in the State made on or after January 1, 2022. Based on our understanding, passage of this bill would result in a minimal decrease in revenue beginning in FY2023. Taxpayer participation in this program to date has been minimal. Farmers already receive a federal and state deduction for such donated agricultural products on federal Schedule F. However, farmers tend to generate little or no net income from Schedule F. The current tax credit generally offsets income taxes generated by farmers attributable to activities outside of farming. Only 1.9 percent of all income tax returns filed in West Virginia are filed by farmers each year. Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2023.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov
