FISCAL NOTE
Date Requested: January 23, 2024
Time Requested: 12:36 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3092 |
Introduced |
SB508 |
|
|---|
| 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 exempt from state personal income taxation Non-grantor Trusts which have tax situs in West Virginia.
According to our interpretation, the bill would create a Personal Income Tax exemption for a non-grantor trust which is created under the laws of the State of West Virginia or has its situs in West Virginia and is administered by any West Virginia resident individual trustee or a corporate trustee with a principal place of business and a physical presence in this state. A non-grantor trust is defined as a trust other than a grantor trust as described in §671 of the Internal Revenue Code. The bill, if passed, would be effective for taxable years beginning on or after January 1, 2025.
Based on our interpretation, the proposed legislation would decrease General Revenue Fund collections by as much as $3.9 million in FY2025, $10.8 million in FY2026, and by increasing amounts in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2025.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
5,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| 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 |
-3,900,000 |
-10,800,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the bill would create a Personal Income Tax exemption for a non-grantor trust which is created under the laws of the State of West Virginia or has its situs in West Virginia and is administered by any West Virginia resident individual trustee or a corporate trustee with a principal place of business and a physical presence in this state. A non-grantor trust is defined as a trust other than a grantor trust as described in §671 of the Internal Revenue Code. The bill, if passed, would be effective for taxable years beginning on or after January 1, 2025.
Based on our interpretation, the proposed legislation would decrease General Revenue Fund collections by as much as $3.9 million in FY2025, $10.8 million in FY2026, and by increasing amounts in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $5,000 in FY2025.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov