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 state income taxes for state and federal retirees by increasing the exemption on retirement income in calculating the federal gross income for state personal income tax purposes.
The increase in the modification for PERS, the Teachers’ Retirement System and federal and military retirees would reduce General Revenue Fund collections by approximately $10 million per year beginning in FY2008.
There would be no additional administrative costs associated with the change in the modification for current tax years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2007
Increase/Decrease
(use"-") |
2008
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 |
-10,000,000 |
-10,000,000 |
Explanation of above estimates (including long-range effect):
The increase in the modification for PERS, the Teachers’ Retirement System and federal and military retirees would reduce General Revenue Fund collections by approximately $10 million per year beginning in FY2008.
There would be no additional administrative costs associated with the change in the modification for current tax years.
Memorandum
The stated purpose of this bill is to reduce state income taxes for state and federal retirees by increasing the exemption on retirement income in calculating the federal gross income for state personal income tax purposes.
Subsection (c) subdivision (5) changes the date for the taxable years from 1986 to 2006. This effectively means that the proviso immediately preceding the date would not be in effect for the twenty-year time frame. This could lead to numerous claims for refunds because the $2,000 limitation on the decreasing modification would be repealed.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us