Date Requested:January 14, 2011
Time Requested:03:10 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1206 Introduced HB2487
CBD Subject: FEDERAL MILITARY OR POLICE PENSIONS
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 amend the West Virginia personal income tax to give retirement income derived from military pensions and from federal police pensions that have been converted into federal civil service pensions the same treatment that such income would have received if it had remained military retirement system or federal police retirement system income.
    
    The State Tax Department does not have access to information necessary to distinguish between normal federal civil service pensions and federal civil service pensions that include converted military pensions or federal police pensions. Thus, we are unable to estimate the potential revenue impact that would result from passage of this bill.
    
    Passage of this bill may require the State Tax Department to alter normal tax return processing in order to determine whether a federal civil service pension was solely attributable to federal civil service or if the pension included converted military or federal police retirement benefits. The additional administrative costs could be significant.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
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):
    The stated purpose of this bill is to amend the West Virginia personal income tax to give retirement income derived from military pensions and from federal police pensions that have been converted into federal civil service pensions the same treatment that such income would have received if it had remained military retirement system or federal police retirement system income.
    
    The State Tax Department does not have access to information necessary to distinguish between normal federal civil service pensions and federal civil service pensions that include converted military pensions or federal police pensions. Thus, we are unable to estimate the potential revenue impact that would result from passage of this bill.
    
    Passage of this bill may require the State Tax Department to alter normal tax return processing in order to determine whether a federal civil service pension was solely attributable to federal civil service or if the pension included converted military or federal police retirement benefits. The additional administrative costs could be significant.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to amend the West Virginia personal income tax to give retirement income derived from military pensions and from federal police pensions that have been converted into federal civil service pensions the same treatment that such income would have received if it had remained military retirement system or federal police retirement system income.
    
    The bill, as written in proposed W. Va. Code §11-21-12j(a), indicates that “retirement income originally available under a federal military or federal police retirement system pension, but which pension has been converted into a federal civil service system pension . . . is treated as military retirement income or federal police income, as applicable, for purposes of the modifications authorized under this article for military and federal police retirement benefits.” While the referenced Article (i.e., W. Va. Code §11-21 et al) specifically provides modifications for military retirement income, the Article does not specifically provide a modification for “federal police retirement” benefits.