FISCAL NOTE
Date Requested: January 26, 2019
Time Requested: 09:12 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2489 |
Introduced |
SB342 |
|
|---|
| CBD Subject: |
Governor -- Bills Requested By |
|---|
|
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 and tier one railroad retirement benefits from personal income tax. The bill specifies an effective date. The bill removes obsolete language.
The bill proposes a modification reducing federal adjusted gross income by the amount of social security income and tier one railroad retirement benefits received on and after January 1, 2019. Additionally, according to the provisions of the bill, the $8,000 senior citizen modification may no longer apply or be reduced if a taxpayer claims the proposed modification.
According to our interpretation, passage of the bill would reduce General Revenue Fund collections by roughly $50 million in FY2020. The overall value of the proposed tax exclusion will grow over time as the population ages and the number of individuals receiving social security benefits increases.
The Governor’s official revenue estimate incorporates the assumption that the Legislature would enact the Governor’s proposed bill to exempt taxable social security benefits from state taxation beginning in tax year 2019. Therefore, relative to the Governor’s official revenue estimate, the provisions of the bill would not impact state tax collections in FY2020.
Additional administrative costs incurred by the State Tax Department would be $51,000 in FY2020 and $40,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
51,000 |
40,000 |
| Personal Services |
0 |
40,000 |
40,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,000 |
0 |
| Other |
0 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-50,000,000 |
0 |
Explanation of above estimates (including long-range effect):
The bill proposes a modification reducing federal adjusted gross income by the amount of social security income and tier one railroad retirement benefits received on and after January 1, 2019. Additionally, according to the provisions of the bill, the $8,000 senior citizen modification may no longer apply or be reduced if a taxpayer claims the proposed modification.
According to our interpretation, passage of the bill would reduce General Revenue Fund collections by roughly $50 million in FY2020. The overall value of the proposed tax exclusion will grow over time as the population ages and the number of individuals receiving social security benefits increases.
The Governor’s official revenue estimate incorporates the assumption that the Legislature would enact the Governor’s proposed bill to exempt taxable social security benefits from state taxation beginning in tax year 2019. Therefore, relative to the Governor’s official revenue estimate, the provisions of the bill would not impact state tax collections in FY2020.
Additional administrative costs incurred by the State Tax Department would be $51,000 in FY2020 and $40,000 upon full implementation.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov