Date Requested:January 22, 2011
Time Requested:10:56 AM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1609 Introduced HB2720
CBD Subject: EXEMPTION FOR FEDERAL RETIREES
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 provide a state income tax exemption to retired federal employees retirement pensions.
    
    This bill, as written, exempts all federal pension income from Personal Income Tax and moves the $20,000 decreasing modification for military retirement income outside the calculation for the senior citizen modification. Passage of this bill would result in a decrease in General Revenue Fund collections of $10.4 million beginning in FY 2013. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    There would be no additional administrative costs associated with the change in the modification for current tax years.

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):
    This bill, as written, exempts all federal pension income from Personal Income Tax and moves the $20,000 decreasing modification for military retirement income outside the calculation for the senior citizen modification. Passage of this bill would result in a decrease in General Revenue Fund collections of $10.4 million beginning in FY 2013. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    There would be no additional administrative costs associated with the change in the modification for current tax years.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to provide a state income tax exemption to retired federal employees retirement pensions.
    
    The provisions of this bill create significant additional disparity between retirees based either on the source of pension income or the size of pension income. One result may be additional legal challenges on the part of less favored retiree groups.