FISCAL NOTE



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 decrease the personal income tax rates for certain taxpayers and raising the personal income tax rates for certain other taxpayers. As written, this bill specifies new marginal tax rates effective for taxable years beginning on or after January 1, 2015. However, the changes proposed in this bill overwrite the existing marginal tax rates. The proposed change would appear to result in two different tax rate schedules for tax year 2014. The existing rates would likely be in effect from January 1, 2014 through the date of enactment of the bill and then the rates for the remainder of 2014 would be those in effect prior to January 1, 1987. Additionally, some specifications of the proposed tax rates for 2015 are not consistent. Due to the aforementioned issues with the bill, as written, we are unable to accurately estimate the potential impact on the General Revenue Fund if the bill passes. Additional administrative costs to the State Tax Department associated with passage of the bill, as written, would be significant. The potential for two different rate schedules for 2014 would greatly increase costs to revise Withholding Tax tables, to revise annual returns, and to notify Taxpayers (both individuals and employers) of the changes made by the bill.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
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


Explanation of above estimates (including long-range effect):


As written, this bill specifies new marginal tax rates effective for taxable years beginning on or after January 1, 2015. However, the changes proposed in this bill overwrite the existing marginal tax rates. The proposed change would appear to result in two different tax rate schedules for tax year 2014. The existing rates would likely be in effect from January 1, 2014 through the date of enactment of the bill and then the rates for the remainder of 2014 would be those in effect prior to January 1, 1987. Additionally, some specifications of the proposed tax rates for 2015 are not consistent. Due to the aforementioned issues with the bill, as written, we are unable to accurately estimate the potential impact on the General Revenue Fund if the bill passes. Additional administrative costs to the State Tax Department associated with passage of the bill, as written, would be significant. The potential for two different rate schedules for 2014 would greatly increase costs to revise Withholding Tax tables, to revise annual returns, and to notify Taxpayers (both individuals and employers) of the changes made by the bill.



Memorandum


The stated purpose of this bill is to decrease the personal income tax rates for certain taxpayers and raising the personal income tax rates for certain other taxpayers. As written, this bill specifies new marginal tax rates effective for taxable years beginning on or after January 1, 2015. However, the changes proposed in this bill overwrite the existing marginal tax rates. The proposed change would appear to result in two different tax rate schedules for tax year 2014. The existing rates would likely be in effect from January 1, 2014 through the date of enactment of the bill and then the rates for the remainder would be those in effect prior to January 1, 1987. Additionally, some specifications of the proposed tax rates for 2015 are not consistent



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