FISCAL NOTE
Date Requested: February 08, 2018
Time Requested: 02:04 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2471 |
Introduced |
HB4474 |
|
|---|
| 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 encourage retirees to move to West Virginia by exempting all monetary benefits derived from retirement income from personal income tax obligations for individuals moving into the state who had not lived in the state for one year immediately preceding the move.
According to our interpretation, the bill seeks to add an additional Schedule M modification reducing federal adjusted gross income. The new modification exempts all monetary benefits from retirement income by persons who have no earned income and have moved into West Virginia and had not lived in the state for one year immediately preceding the move. We are unable to estimate the revenue loss associated with this bill.
Additional administrative costs incurred by the State Tax Department are expected to be $83,000 in FY2020 and $70,000 for each year thereafter.
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 |
0 |
70,000 |
| Personal Services |
0 |
0 |
70,000 |
| 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):
According to our interpretation, the bill seeks to add an additional Schedule M modification reducing federal adjusted gross income. The new modification exempts all monetary benefits from retirement income by persons who have no earned income and have moved into West Virginia and had not lived in the state for one year immediately preceding the move. We are unable to estimate the revenue loss associated with this bill.
Additional administrative costs incurred by the State Tax Department are expected to be $83,000 in FY2020 and $70,000 for each year thereafter.
Memorandum
The stated purpose of this bill is to encourage retirees to move to West Virginia by exempting all monetary benefits derived from retirement income from personal income tax obligations for individuals moving into the state who had not lived in the state for one year immediately preceding the move.
“Retirement income” is not defined. The bill appears to exclude from Personal Income Tax all income that can be associated with retirement. The phrase “moved into West Virginia and had not lived in the state for one year immediately preceding the move” lacks specificity.
The bill is not entirely clear regarding whether the modification is a permanent one for any retiree relocating to West Virginia or if it is meant to be limited to the year in which they relocate to West Virginia. Lack of clear definitions and reporting requirements will make administration of the modification difficult.
The currently pending case of Dawson v. State Tax Commissioner of West Virginia may have implications for this bill, depending on the decision by the U.S. Supreme Court. The bill sets up a potential conflict among federal retirees should the Dawson decision stand.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov