FISCAL NOTE
Date Requested: February 24, 2016 Time Requested: 10:46 AM |
Agency: |
Tax Department, State |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2882 |
Introduced |
SB672 |
|
CBD Subject: |
Legal Gaming, 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 clarify that a lottery prize is a West Virginia source income for a nonresident. The bill provides that lottery winnings are not compensation for personal services performed within the state by nonresidents.
Based on our interpretation, this bill would tax impose a withholding requirement on nonresidents for lottery winnings in excess of $5,000 as source income in West Virginia. Based on available information, it is estimated that the proposed bill would generate roughly $25,000 in Personal Income Tax revenue for the first year of implementation. However, revenue collection trends will be volatile over time due to the nature of the income source.
Additional administrative costs incurred by the State Tax Department are expected to be $1,500 in FY2017. There are no additional administrative costs expected for the remainder of FY2016 or for any years following FY2017.
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 |
1,500 |
0 |
Personal Services |
0 |
0 |
0 |
Current Expenses |
0 |
0 |
0 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
0 |
1,500 |
0 |
2. Estimated Total Revenues |
0 |
0 |
25,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, this bill would tax impose a withholding requirement on nonresidents for lottery winnings in excess of $5,000 as source income in West Virginia. Based on available information, it is estimated that the proposed bill would generate roughly $25,000 in Personal Income Tax revenue for the first year of implementation. However, revenue collection trends will be volatile over time due to the nature of the income source.
Additional administrative costs incurred by the State Tax Department are expected to be $1,500 in FY2017. There are no additional administrative costs expected for the remainder of FY2016 or for any years following FY2017.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov