Date Requested:February 21, 2013
Time Requested:05:05 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R2067 Introduced SB184
CBD Subject: WV PERSONAL INCOME TAX ACT 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 adjusted gross income and certain other terms used in the West Virginia Personal Income Tax Act by bringing them into conformity with their meaning for Internal Revenue Code’s definitions; and specifying effective dates.
    
     As written, this bill will update West Virginia’s Personal Income Tax Law with the laws of the United States, in effect prior to January 3, 2013, 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 January 1, 2012 but before January 3, 2013. Federal tax law provisions enacted in 2012, and in the first days of 2013, that have an impact on State revenue were included in the Governor’s official revenue estimates for FY2014.
    
     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
2013
Increase/Decrease
(use"-")
2014
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 Personal Income Tax Law with the laws of the United States, in effect prior to January 3, 2013, 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 January 1, 2012 but before January 3, 2013. Federal tax law provisions enacted in 2012, and in the first days of 2013, that have an impact on State revenue were included in the Governor’s official revenue estimates for FY2014. The estimated cost in FY2014 Personal Income Tax revenue attributable to conformity with the federal statutes that were enacted prior to January 3, 2013 is roughly $7.7 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 FY2016 and beyond.
    
     Additional administrative costs to the State Tax Department associated with this bill will be minimal.
    


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov