Date Requested:February 24, 2009
Time Requested:06:18 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2009R2300 Introduced SB329
CBD Subject: PERSONAL INCOME TAX TERMS 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 definitions in the Internal Revenue Code.
    
    As written, this bill will update West Virginia’s Personal Income Tax Law with the laws of the United States that relate to the determination of income for federal income tax purposes in effect prior to February 18, 2009. That is, State law will conform with federal statutes including the recently signed Stimulus Bill (i.e., the American Recovery and Reinvestment Act of 2009). The major Stimulus Bill provisions affecting the Personal Income Tax include the following: an extension of bonus depreciation and Section 179 expenses; extending net operating loss carry backs to five years, and an exclusion of up to $2,400 of unemployment compensation benefits. The aforementioned provisions were included in the Governor’s official revenue estimates for FY2010.
    
    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
2009
Increase/Decrease
(use"-")
2010
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 West Virginia’s Personal Income Tax Law with the laws of the United States that relate to the determination of income for federal income tax purposes in effect prior to February 18, 2009. That is, State law will conform with federal statutes including the recently signed Stimulus Bill (i.e., the American Recovery and Reinvestment Act of 2009). The major Stimulus Bill provisions affecting the Personal Income Tax include the following: an extension of bonus depreciation and Section 179 expenses; extending net operating loss carry backs to five years, and an exclusion of up to $2,400 of unemployment compensation benefits.
    
    If the State adopts these changes, General Revenue Fund collections attributable to the Personal Income Tax are estimated to decrease by roughly $9.0 million in FY2010, $5.7 million in FY2011 and $0.4 million in FY2012. Total revenues would then increase by roughly $1.1 million in FY2013, FY2014, and FY2015. These changes were already included in the Governor’s official revenue estimates for FY2010.
    
    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