Date Requested:February 28, 2009
Time Requested:02:54 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2009R2299 Introduced SB410
CBD Subject: CORPORATE NET 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 taxable income” and certain other terms in the West Virginia Corporation Net Income Tax Act by bringing them into conformity with their meaning for Internal Revenue Code’s definitions.
    
    As written, this bill will update West Virginia’s Corporation Net 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 Corporation Net Income Tax include an extension of bonus depreciation and Section 179 expenses. 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 Corporation Net 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 Corporation Net Income Tax include an extension of bonus depreciation and Section 179 expenses. The aforementioned provisions were included in the Governor’s official revenue estimates for FY2010.
    
    If the State adopts these changes, General Revenue Fund collections attributable to the Corporation Net Income Tax are estimated to decrease by roughly $10.7 million in FY2010, $24.1 million in FY2011 and $2.1 million in FY2012. Total revenues would then increase by roughly $4.1 million in FY2013, $3.5 million in FY2014, and $3.8 million in 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