FISCAL NOTE
Date Requested: January 17, 2023
Time Requested: 03:10 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1334 |
Introduced |
HB2311 |
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| CBD Subject: |
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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 allow a surviving spouse on additional tax exemption of $20,000 beginning after December 31, 2023, for two taxable years after death of the spouse. It also defines surviving spouse.
Per our interpretation, the legislation would add an additional modification reducing federal adjusted gross income for a surviving spouse. As written, only those taxpayers who are already receiving benefits under §11-21-12(c)(5) (federal civil services retirees and State government retirees receiving benefits under PERS or TRS) would be eligible for the additional modification. For taxable years beginning after December 31, 2023, a surviving spouse would be allowed one additional exemption of $20,000 for the two taxable years after the tax year in which the spouse died. The exemption is limited to a surviving spouse who has not remarried at any time before the end of the taxable year for which the return is being filed.
Based on our interpretation, the legislation, if passed, would decrease General Revenue Fund collections by a minimal amount in FY2024 and by $500,000 in FY2025 and in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2025.
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 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-500,000 |
Explanation of above estimates (including long-range effect):
Per our interpretation, the legislation would add an additional modification reducing federal adjusted gross income for a surviving spouse. As written, only those taxpayers who are already receiving benefits under §11-21-12(c)(5) (federal civil services retirees and State government retirees receiving benefits under PERS or TRS) would be eligible for the additional modification. For taxable years beginning after December 31, 2023, a surviving spouse would be allowed one additional exemption of $20,000 for the two taxable years after the tax year in which the spouse died. The exemption is limited to a surviving spouse who has not remarried at any time before the end of the taxable year for which the return is being filed.
Based on our interpretation, the legislation, if passed, would decrease General Revenue Fund collections by a minimal amount in FY2024 and by $500,000 in FY2025 and in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $10,000 in FY2025.
Memorandum
The stated purpose of this bill is to allow a surviving spouse on additional tax exemption of $20,000 beginning after December 31, 2023, for two taxable years after death of the spouse. It also defines surviving spouse.
This bill provides that surviving spouses receiving benefits under the West Virginia Public Employees Retirement System, West Virginia State Teachers Retirement System, or benefits received under certain federal retirement systems may take an additional decreasing modification of $20,000 for the two taxable years beginning after the year of death of the deceased spouse.
It might be advisable to say, “in each of the two taxable years…” Otherwise, it might be interpreted to mean a $20,000 modification “spread over” two years. The $20,000 modification would be in addition to the $2,000 maximum modification already permitted under subdivision §11-21-12 (c)(5).
The bill is not accurately described in the bill title and purpose as an “exemption.” Rather, the statute sets forth a (decreasing) “modification” allowing taxpayers to subtract certain 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