FISCAL NOTE
Date Requested: January 10, 2018
Time Requested: 02:34 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1207 |
Introduced |
SB72 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to allow adjustment of gross income for calculating personal income liability for certain retirees entitled to reduced benefits related to a terminated defined benefit plan.
Retirees receiving pensions from defined pension plans that terminated and are being paid a reduced maximum benefit guarantee from the federal Pension Benefit Guaranty Corporation (PBGC) received a personal income tax adjustment equal to the amount of pension income not received through Tax Year 2014. This bill would reinstate the allowance of that decreasing modification beginning in Tax Year 2018 and terminating after the end of Tax Year 2021. Passage of the proposed legislation would result in a potential loss from Tax Year 2018 returns of approximately $400,000 occurring in FY2019. Approximately $400,000 in annual revenue losses are expected for the remaining years until termination.
Additional administrative costs to the State Tax Department would be $10,000 in FY2019 and $5,000 in subsequent years. No additional administrative costs are expected for the remainder of FY2018.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2018
Increase/Decrease
(use"-") |
2019
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
10,000 |
5,000 |
| Personal Services |
0 |
5,000 |
5,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
5,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-400,000 |
-400,000 |
Explanation of above estimates (including long-range effect):
Retirees receiving pensions from defined pension plans that terminated and are being paid a reduced maximum benefit guarantee from the federal Pension Benefit Guaranty Corporation (PBGC) received a personal income tax adjustment equal to the amount of pension income not received through Tax Year 2014. This bill would reinstate the allowance of that decreasing modification beginning in Tax Year 2018 and terminating after the end of Tax Year 2021. Passage of the proposed legislation would result in a potential loss from Tax Year 2018 returns of approximately $400,000 occurring in FY2019. Approximately $400,000 in annual revenue losses are expected for the remaining years until termination.
Additional administrative costs to the State Tax Department would be $10,000 in FY2019 and $5,000 in subsequent years. No additional administrative costs are expected for the remainder of FY2018.
Memorandum
The stated purpose of this bill is to allow adjustment of gross income for calculating personal income liability for certain retirees entitled to reduced benefits related to a terminated defined benefit plan.
There is a possible title defect in the bill. The title states that this is an “adjustment to gross income” rather than a modification reducing federal adjusted gross income.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov