FISCAL NOTE

Date Requested: February 28, 2017
Time Requested: 01:19 PM
Agency: Insurance Commission
CBD Number: Version: Bill Number: Resolution Number:
2516 Introduced SB464
CBD Subject:


FUND(S):

7152

Sources of Revenue:

Special Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


If enacted, Senate Bill 464 will have no fiscal impact on the operations, revenues or expense of the Offices of the Insurance Commissioner. However, the enactment of Senate Bill 464 will have impact on the State’s General Revenue Accounts. See memorandum entry for estimates of the impact to General Revenue.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
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):






Memorandum


Senate Bill 464, if enacted, would eliminate taxation on annuity considerations collected and received by a life insurer. The OIC estimates that this would result in a reduction in revenues of approximately $4.25 million per year to the State’s General Revenue Fund. The annuity tax revenues collected under §33-3-15 for the prior three fiscal years are as follows: FY2015 - $5,056,402.76 FY2014 - $3,935,740.00 FY2013 - $3,741,697.00 The average net annuity collections for the three years is $4,244,613.25, however, this average and the numbers above do not reflect the full amount of credits that may be taken in future periods against the taxes collected in these fiscal years. Annuity tax paying companies that have elected to pay their taxes on a “front-end” basis can request a refund for any tax paid since the inception of the policy if it has not annuitized. Therefore, the actual collections in any given year may end up being refunded several years in the future, which distorts the financial impact of the overall tax.



    Person submitting Fiscal Note: Melinda Ashworth Kiss
    Email Address: Melinda.A.Kiss@wv.gov