Date Requested:January 21, 2011
Time Requested:01:40 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2084 Introduced SB205
CBD Subject: CORPORATE NET INCOME TAX UPDATE
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 update the meaning of “federal taxable income” and certain other terms used but not defined in the West Virginia Corporation Net Income Tax Act by bringing them into conformity with their meaning under the Internal Revenue Code for federal income tax purposes.
    
    As written, this bill will update West Virginia’s Corporation Net Income Tax Law with the laws of the United States, in effect prior to January 1, 2011, that relate to the determination of income for federal income tax purposes. That is, State law will conform with federal statutes for changes made after December 31, 2009 but before January 1, 2011 (i.e., changes during the year 2010). Federal tax law provisions enacted in 2010 that have an impact on State revenue were included in the Governor’s official revenue estimates for FY2012.
    
    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
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):
    Passage of this bill will update West Virginia’s Corporation Net Income Tax Law with the laws of the United States, in effect prior to January 1, 2011, that relate to the determination of income for federal income tax purposes. That is, State law will conform with federal statutes for changes made after December 31, 2009 but before January 1, 2011 (i.e., changes during the year 2010). Federal tax law provisions enacted in 2010 that have an impact on State revenue were included in the Governor’s official revenue estimates for FY2012. The estimated cost in FY2012 Corporation Net Income Tax revenue attributable to conformity with the federal statutes that were enacted in 2010 is roughly $46.2 million. The majority of the cost is associated with extended bonus depreciation provisions. Since the primary impact of bonus depreciation is a change in the timing of tax revenue, less revenue in the near term is offset by greater tax revenue in FY2014 and beyond.
    
    Additional administrative costs to the State Tax Department associated with this bill will be minimal.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov