FISCAL NOTE
Date Requested: January 27, 2016
Time Requested: 03:22 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2160 |
Introduced |
SB402 |
|
|---|
| CBD Subject: |
|
|---|
|
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 exclude pension and annuity income of certain law-enforcement officers and firefighters from West Virginia income taxes.
This bill changes W. Va. Code Chapter 11-21-12(c)(6) so that the decreasing modification for income from any West Virginia police, West Virginia Firemen’s Retirement System or the West Virginia State Police Death, Disability and Retirement Fund, the West Virginia State Police Retirement System or the West Virginia Deputy Sheriff Retirement System, including any survivorship annuities derived from any of these programs, becomes available to all individuals subject to West Virginia’s personal income tax who receive retirement income from any police, fireman’s retirement system or state police death, disability and retirement fund, state police retirement system, or deputy sheriff retirement system, including survivorship annuities derived from any of these programs. We are unable to quantify the revenue loss from this bill since the number of taxpayers who would qualify is unknown. This bill extends this modification to retirees from other retirement plans, including certain members of the Public Employees Retirement System, certain federal retirees and out-of-state plans. The total potential cost could be substantial.
Additional administrative costs to the State Tax Department for form changes, return processing, etc., would be $54,600 in FY2017 and $35,100 in subsequent years. However, additional litigation by less favored groups, including federal government retirees, could result in a more significant increase in administrative costs to the State Tax Department.
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 |
0 |
54,600 |
35,100 |
| Personal Services |
0 |
35,100 |
35,100 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
10,500 |
0 |
| Other |
0 |
9,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
This bill changes W. Va. Code Chapter 11-21-12(c)(6) so that the decreasing modification for income from any West Virginia police, West Virginia Firemen’s Retirement System or the West Virginia State Police Death, Disability and Retirement Fund, the West Virginia State Police Retirement System or the West Virginia Deputy Sheriff Retirement System, including any survivorship annuities derived from any of these programs, becomes available to all individuals subject to West Virginia’s personal income tax who receive retirement income from any police, fireman’s retirement system or state police death, disability and retirement fund, state police retirement system, or deputy sheriff retirement system, including survivorship annuities derived from any of these programs. We are unable to quantify the revenue loss from this bill since the number of taxpayers who would qualify is unknown. This bill extends this modification to retirees from other retirement plans, including certain members of the Public Employees Retirement System, certain federal retirees and out-of-state plans. The total potential cost could be substantial.
Additional administrative costs to the State Tax Department for form changes, return processing, etc., would be $54,600 in FY2017 and $35,100 in subsequent years. However, additional litigation by less favored groups, including federal government retirees, could result in a more significant increase in administrative costs to the State Tax Department.
Memorandum
The stated purpose of this bill is to exclude pension and annuity income of certain law-enforcement officers and firefighters from West Virginia income taxes.
This bill changes W. Va. Code Chapter 11-21-12(c)(6) so that the decreasing modification for income from any West Virginia police, West Virginia Firemen’s Retirement System or the West Virginia State Police Death, Disability and Retirement Fund, the West Virginia State Police Retirement System or the West Virginia Deputy Sheriff Retirement System, including any survivorship annuities derived from any of these programs, becomes available to all individuals subject to West Virginia’s personal income tax who receive retirement income from any police, fireman’s retirement system or state police death, disability and retirement fund, state police retirement system, or deputy sheriff retirement system, including survivorship annuities derived from any of these programs. The bill makes the exemption more vague resulting in difficulty administering the exemption and possible litigation.
Income derived from the West Virginia Public Employees Retirement System, the West Virginia State Teachers Retirement System and all forms of military retirement, including regular Armed Forces, Reserves and National Guard, including any survivorship annuities derived therefrom, would remain subject to a $2,000 exemption under this section. It should be noted that some police officers receive their pensions through the West Virginia Public Employees Retirement System so there is a conflict of law.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov