Date Requested: January 20, 2015
Time Requested: 04:41 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2097 Introduced HB2230
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 subtract social security benefits from federal adjusted gross income to determine West Virginia adjusted gross income for purposes of personal income tax.
    
    This bill proposes a modification that would reduce federal adjusted gross income, for West Virginia Personal Income Tax purposes, by the amount of Social Security benefits paid to the extent that the benefits are included in federal adjusted gross income. The modification would be effective for taxable years beginning after December 31, 2015.
    
    According to our interpretation, passage of this bill would reduce General Revenue Fund collections by roughly $78.7 million in FY2017. The value of this proposed tax exclusion will escalate over time as members of the baby-boom generation begin receiving Social Security benefits.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $10,000 in FY2017.



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 -78,700,000


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


    This bill proposes a modification that would reduce federal adjusted gross income, for West Virginia Personal Income Tax purposes, by the amount of Social Security benefits paid to the extent that the benefits are included in federal adjusted gross income. The modification would be effective for taxable years beginning after December 31, 2015.
    
    According to our interpretation, passage of this bill would reduce General Revenue Fund collections by roughly $78.7 million in FY2017. The value of this proposed tax exclusion will escalate over time as members of the baby-boom generation begin receiving Social Security benefits.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $10,000 in FY2017.
    



Memorandum


    The stated purpose of this bill is to subtract social security benefits from federal adjusted gross income to determine West Virginia adjusted gross income for purposes of personal income tax.
    
    The provisions of the bill fail to renumber former subdivision (12).
    



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