FISCAL NOTE
Date Requested: January 14, 2016
Time Requested: 10:56 AM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1092 |
Introduced |
SB86 |
|
|---|
| CBD Subject: |
Tax |
|---|
|
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 continue providing a personal income tax adjustment to the gross income of certain retirees receiving pensions from defined pension plans that terminated and are being paid a reduced maximum benefit guarantee.
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 extend the allowance of that decreasing modification for Tax Year 2015 through Tax Year 2019. The allowance for Tax Year 2015 would be retroactive and result in amended returns for that tax year. Passage of the proposed legislation would result in a potential loss for Tax Year 2015 of approximately $400,000. Most of this loss would occur in Fiscal Year 2017, with the potential for some of this loss occurring in Fiscal Year 2016 dependent on when amended returns are filed. An additional loss of $400,000 is anticipated in Fiscal Year 2017 from Tax Year 2016 returns. Approximately $400,000 in annual revenue losses are expected for Fiscal Years 2018 and 2019.
The administrative cost to the State Tax Department would be $25,500 in the current fiscal year, $11,550 in FY 2017 and $6,550 in subsequent years.
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 |
25,500 |
11,500 |
6,550 |
| Personal Services |
25,000 |
5,000 |
5,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
500 |
6,550 |
1,550 |
| 2. Estimated Total Revenues |
0 |
-800,000 |
-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 extend the allowance of that decreasing modification for Tax Year 2015 through Tax Year 2019. The allowance for Tax Year 2015 would be retroactive and result in amended returns for that tax year. Passage of the proposed legislation would result in a potential loss for Tax Year 2015 of approximately $400,000. Most of this loss would occur in Fiscal Year 2017, with the potential for some of this loss occurring in Fiscal Year 2016 dependent on when amended returns are filed. An additional loss of $400,000 is anticipated in Fiscal Year 2017 from Tax Year 2016 returns. Approximately $400,000 in annual revenue losses are expected for Fiscal Years 2018 and 2019. In Tax Year 2013, a total of 1,521 returns with PBGC modifications were filed. This number decreased to 1,213 returns in Tax Year 2014.
The administrative cost to the State Tax Department would be $25,500 in the current fiscal year, $11,550 in FY 2017 and $6,550 in subsequent years.
Memorandum
The stated purpose of this bill is to continue providing a personal income tax adjustment to the gross income of certain retirees receiving pensions from defined pension plans that terminated and are being paid a reduced maximum benefit guarantee.
The section of the W. Va. Code amended by this bill terminated on January 1, 2015. The bill would extend the termination date of this decreasing modification to January 1, 2019. However, without clarification of language, the wording of this bill could result in a gap year of the modification (i.e., Tax Year 2015) when the adjustment is not available. The Tax Year 2015 Personal Income Tax forms do not provide a line item for this modification. The fiscal note was developed under the assumption that the provisions of this bill would be treated as retroactive to Tax Year 2015.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov