Date Requested: January 23, 2015
Time Requested: 12:52 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
2289 Introduced HB2253
CBD Subject: Tax


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 reduce state income taxes for state and federal retirees by increasing the exemption on retirement income in calculating the federal gross income for state personal income tax purposes.
    
    Although the stated purpose is to increase the exemption for retirement income for state and federal retirees, the bill, as written, only increases the decreasing modification from $2,000 to $20,000 for federal retirees beginning with Tax Year 2016. Passage of this bill would reduce General Revenue Fund collections by roughly $6.6 million in FY2017. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    Additional administrative costs to the State Tax Department should be minimal. However, additional litigation by less favored groups could result in an increase in administrative costs to the State Tax Department.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
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 -6,600,000


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


    The bill, as written, only increases the decreasing modification from $2,000 to $20,000 for federal retirees beginning with Tax Year 2016. Passage of this bill would reduce General Revenue Fund collections by roughly $6.6 million in FY2017. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    Additional administrative costs to the State Tax Department should be minimal. However, additional litigation by less favored groups could result in an increase in administrative costs to the State Tax Department.
    



Memorandum


    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov