FISCAL NOTE

Date Requested: March 03, 2017
Time Requested: 11:44 AM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
2889 Introduced HB2789
CBD Subject: Taxation


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 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 $19,000 in FY2019 and $10,000 for each year thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 19,000
Personal Services 0 0 10,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 9,000
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. Data related to retiree immigration into West Virginia and the related income of those individuals are not readily available. Additional administrative costs incurred by the State Tax Department are expected to be $19,000 in FY2019 and $10,000 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. This bill appears to exclude all income that can be associated with retirement from Personal Income Tax. The phrase, “moved into West Virginia and had not lived in the state for one year immediately preceding the move” lacks specificity and may be susceptible to multiple interpretations. The bill is unclear 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. Lack of clear definitions and reporting requirements will make administration of the modification difficult.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov