Date Requested:March 22, 2005
Time Requested:05:01 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R1878 Intro SB623
CBD Subject: Personal Income Tax Updated
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 purpose of this bill is to update the meaning of “federal adjusted gross income” and certain other terms used but not defined in the West Virginia Personal Income Tax Act by bringing them into conformity with their meanings for federal income tax purposes.
    
    The American Jobs Creation Act, which was signed into law on October 22, 2004, includes a federal tax benefit for certain domestic production activities. This tax benefit provision was enacted in response to tariffs on United States domestic manufacturing goods imposed by the World Trade Organization, which previously determined that the Internal Revenue Code allowed United States manufacturers competing with other manufacturers an unfair trade advantage. The purpose of new section 11-21-12g is to disallow this deduction when determining West Virginia personal income tax liability.
    
    According to our interpretation, passage of this bill will result in change in conformity with the Governor’s official revenue estimates for FY2006.
    
    Additional administrative costs to the State Tax Department associated with this bill will be minimal.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
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 0
3. Explanation of above estimates (including long-range effect):
    Passage of this bill will update the meaning of “federal adjusted gross income” as defined by the laws of the United States as of December 31, 2004 while disallowing the deduction for certain domestic production activities.
    
    According to our interpretation, passage of this bill will result in change in conformity with the Governor’s official revenue estimates for FY2006.
    
    Additional administrative costs to the State Tax Department associated with this bill will be minimal.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us