FISCAL NOTE
Date Requested: January 13, 2023
Time Requested: 04:41 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1884 |
Introduced |
SB193 |
|
|---|
| 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 social security benefits from state personal income taxation for tax years beginning on or after January 1, 2023.
According to our interpretation, passage of this bill would exempt all federally taxable Social Security benefits from personal income tax by making the income limitation language present in current law no longer applicable for taxable years beginning on or after January 1, 2023. Under current law, a decreasing modification for Social Security benefits is allowed when the federal adjusted gross income of a married couple filing a joint return does not exceed $100,000, or $50,000 in the case of a single individual or a married individual filing a single return.
Based on our interpretation and updated statistical data and Personal Income Tax rates currently in effect, passage of this bill would reduce General Revenue Fund collections by a minimal amount in FY2023, by $44.1 million in FY2024, by $46.0 million in FY2025, and by increasing amounts in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $56,500 in FY 2024 and $45,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
56,500 |
45,000 |
| Personal Services |
0 |
45,000 |
45,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,500 |
0 |
| Other |
0 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-44,100,000 |
-46,000,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, passage of this bill would exempt all federally taxable Social Security benefits from personal income tax by making the income limitation language present in current law no longer applicable for taxable years beginning on or after January 1, 2023. Under current law, a decreasing modification for Social Security benefits is allowed when the federal adjusted gross income of a married couple filing a joint return does not exceed $100,000, or $50,000 in the case of a single individual or a married individual filing a single return.
Based on our interpretation and updated statistical data and Personal Income Tax rates currently in effect, passage of this bill would reduce General Revenue Fund collections by a minimal amount in FY2023, by $44.1 million in FY2024, by $46.0 million in FY2025, and by increasing amounts in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $56,500 in FY 2024 and $45,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to exempt social security benefits from state personal income taxation for tax years beginning on or after January 1, 2023.
The bill title and the bill’s purpose describe this as “exempting social security benefits from personal income tax.” This bill is not accurately described as an exemption, but rather as a modification allowing taxpayers to subtract social security benefits from their federal adjusted gross income, to the extent included therein, for purposes of personal income tax.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov