Date Requested:January 14, 2012
Time Requested:01:06 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1070 Carry Over HB2274
CBD Subject: EXEMPTION FOR VETERANS
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 exempt from state income tax, for five years, veterans and their spouses who locate in the state following separation from military service.
    
    According to our interpretation, passage of this bill would result in a decrease in State General Revenue Fund collections of at least $41.2 million per year beginning in FY 2014. Due to the lack of an internal effective date, this bill would not become effective until the 2013 tax year.
    
    The bill provides for a blanket income tax exemption to honorably discharged veterans and their spouse for a period of five years following separation from military service. The bill also expands the five-year exemption qualification to any veteran, who was honorably discharged within a ten-year period of the bill’s effective date.
    
    If all returns were accepted as filed, there would be no additional costs to the State Tax Department associated with passage of this bill. However, the bill contains a number of uncertainties that may cause significant administrative difficulties and increased costs.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
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 -41,200,000
3. Explanation of above estimates (including long-range effect):
    This bill provides a five-year blanket income tax exemption from the resident personal income tax to all honorably discharged veterans of the past ten years. Passage of this bill will reduce General Revenue Fund collections by at least $41.2 million per year beginning in FY 2014. The provisions of the bill would apply to all honorably discharged members of the military, who received their discharge over the past ten years. According to the Census Bureau West Virginia has had approximately 13,000 veterans within the last 10 years.
    
    If all returns were accepted as filed, there would be no additional costs to the State Tax Department associated with passage of this bill. However, the bill contains a number of uncertainties that may cause significant administrative difficulties and increased costs.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to exempt from state income tax, for five years, veterans and their spouses who locate in the state following separation from military service.
    
    As written, the bill contains a number of uncertainties that may cause significant administrative difficulties.