FISCAL NOTE
Date Requested: January 28, 2026
Time Requested: 04:49 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3157 |
Introduced |
SB637 |
|
|---|
| CBD Subject: |
Professions and Occupations; Taxation |
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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 establish a tax credit for physicians who are new graduates and locate in West Virginia to practice medicine for at least six years.
Based on our interpretation, the bill would create a non-refundable tax credit of up to 100 percent of the taxpayer’s taxable income for up to three consecutive years per eligible physician. According to data provided by the West Virginia Higher Education Policy Commission, approximately 243 medical school graduates, from the most recent class, practice medicine in the state. The proposed tax credit would eliminate 100 percent of any Personal Income Tax liability related to all income reported on an annual income tax return for any qualified physician, and spouse if applicable, for those tax years with more than 95.18 percent of the calculated credit unused. The credit would be allowed beginning in Tax Year 2026. Provisions of the bill would result in revenue loss of $2.8 million in FY2027, $5.6 million in FY2028, and $11.2 million in FY2029 and subsequent fiscal years.
Additional administrative costs would be $46,150 in FY2026 and $22,500 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
46,150 |
22,500 |
22,500 |
| Personal Services |
22,500 |
22,500 |
22,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
1,650 |
0 |
0 |
| Other |
22,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-2,800,000 |
-11,200,000 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, the bill would create a non-refundable tax credit of up to 100 percent of the taxpayer’s taxable income for up to three consecutive years per eligible physician. According to data provided by the West Virginia Higher Education Policy Commission, approximately 243 medical school graduates, from the most recent class, practice medicine in the state. The proposed tax credit would eliminate 100 percent of any Personal Income Tax liability related to all income reported on an annual income tax return for any qualified physician, and spouse if applicable, for those tax years with more than 95.18 percent of the calculated credit unused. The credit would be allowed beginning in Tax Year 2026. Provisions of the bill would result in revenue loss of $2.8 million in FY2027, $5.6 million in FY2028, and $11.2 million in FY2029 and subsequent fiscal years.
Additional administrative costs would be $46,150 in FY2026 and $22,500 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to establish a tax credit for physicians who are new graduates and locate in West Virginia to practice medicine for at least six years.
The bill is unclear about how the amount of credit is determined. Section 4 provides that the credit may not exceed the taxpayer’s “personal taxable income,” but does not mention any lesser amount. Section 6 then states that the credit is applied “against the tax payable by the eligible taxpayer.” The bill apparently does not recognize the difference between “taxable income” and “tax payable,” or does not account for how to handle the difference.
Furthermore, Section 5 provides that no carryback or carryforward is allowed, and that any unused tax credit is forfeited. However, the bill never states that the credit is non-refundable. If a physician has “personal taxable income” of $100,000, but has “tax payable” of $10,000, then it is unclear whether the credit amount is limited to $10,000 for that year.
The bill provides that “[t]his amount may be claimed only for three consecutive years.” The bill is unclear regarding what amount “this amount” refers to and when the three consecutive years would begin.
The effective date is given as “for taxable years beginning July 1, 2026.” No personal income tax taxable year begins on July 1 of any year, so the meaning of this effective date is problematic.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov