Date Requested:January 14, 2012
Time Requested:01:20 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2469 Carry Over HB3009
CBD Subject: RAISING PERSONAL INCOME TAX EXEMPTION
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 raise the maximum personal income tax exemption for persons over the age of sixty-five and for persons who are totally disabled.
    
    The bill, as written, increases the modification for senior citizens and persons who are totally and permanently disabled from $8,000 to $20,000, effective for tax years beginning after December 31, 2010. The provisions of this bill would reduce General Revenue Fund collections by roughly $104.1 million in FY2013. The change in the modification for Tax Year 2011 returns will result in amended returns. The revenue loss for FY2013 includes the loss for those amended 2011 returns as well as the loss for Tax Year 2012 returns. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    Since passage of this bill would result in the processing of additional refunds in Fiscal Year 2013 due to amended returns, additional costs to the State Tax Department would be significant.
    

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 -104,100,000 0
3. Explanation of above estimates (including long-range effect):
    The bill, as written, increases the modification for senior citizens and persons who are totally and permanently disabled from $8,000 to $20,000, effective for tax years beginning after December 31, 2010. The provisions of this bill would reduce General Revenue Fund collections by roughly $104.1 million in FY2013. The change in the modification for Tax Year 2011 returns will result in amended returns. The revenue loss for FY2013 includes the loss for those amended 2011 returns as well as the loss for Tax Year 2012 returns. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    Since passage of this bill would result in the processing of additional refunds in Fiscal Year 2013 due to amended returns, additional costs to the State Tax Department would be significant.
    
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to raise the maximum personal income tax exemption for persons over the age of sixty-five and for persons who are totally disabled.
    
    The proposed bill crosses out the former amount and former effective date of after December 31, 1986. This creates a problem since the statute, if enacted as written, would appear to begin in the year 2011.