FISCAL NOTE

Date Requested: February 03, 2016
Time Requested: 02:43 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
2375 Introduced SB487
CBD Subject: Taxation


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 exempt social security benefits from personal income tax.
    
    The 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 the bill would reduce General Revenue Fund collections by roughly $85.0 million in FY2017 due to the exclusion of taxable social security benefits from the State Personal Income Tax. The value of the proposed tax exclusion will escalate over time as members of the baby-boom generation begin receiving Social Security benefits.
    
    Additional administrative costs incurred by the State Tax Department would be $19,250 in FY2017 and $10,000 thereafter.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 19,250 10,000
Personal Services 0 10,000 10,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 9,250 0
2. Estimated Total Revenues 0 -85,000,000 0


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


    According to our interpretation, passage of the bill would reduce General Revenue Fund collections by roughly $85.0 million in FY2017 due to the exclusion of taxable social security benefits from the State Personal Income Tax. The value of the proposed tax exclusion will escalate over time as members of the baby-boom generation begin receiving Social Security benefits.
    
    Additional administrative costs incurred by the State Tax Department would be $19,250 in FY2017 and $10,000 thereafter.
    
    



Memorandum


    



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