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 bill, as written, moves the decreasing modification for pension benefits from PERS, the Teachers’ Retirement System and federal retirement plans outside the calculations for the $8,000 senior citizens’ modification and increases the exempt amount for federal retirees to $20,000 beginning with Tax Year 2009. The provisions of this bill would reduce General Revenue Fund collections by roughly $22.2 million in FY2011 and $11.1 million in FY2012. The change in the modifications for Tax Year 2009 would result in amended returns. The revenue loss for FY2011 includes the loss for those amended 2009 returns as well as the loss for Tax Year 2010 returns. Costs will rise significantly after 2012 as more baby-boomers begin to qualify for this modification.
Additional administrative costs to the Tax Department in FY 2011 could be significant due to changes needed in the computer system and processing of amended returns for Tax Year 2009.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2010 Increase/Decrease (use"-") |
2011 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 |
-22,200,000 |
0 |
Explanation of above estimates (including long-range effect):
The bill, as written, moves the decreasing modification for pension benefits from PERS, the Teachers’ Retirement System and federal retirement plans outside the calculations for the $8,000 senior citizens’ modification and increases the exempt amount for federal retirees to $20,000 beginning with Tax Year 2009. The provisions of this bill would reduce General Revenue Fund collections by roughly $22.2 million in FY2011 and $11.1 million in FY2012. The change in the modifications for Tax Year 2009 would result in amended returns. The revenue loss for FY2011 includes the loss for those amended 2009 returns as well as the loss for Tax Year 2010 returns. Costs will rise significantly after 2012 as more baby-boomers begin to qualify for this modification.
Additional administrative costs to the Tax Department in FY 2011 could be significant due to changes needed in the computer system and processing of amended returns for Tax Year 2009.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov