FISCAL NOTE
Date Requested: March 11, 2025
Time Requested: 01:08 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3448 |
Introduced |
SB618 |
|
|---|
| CBD Subject: |
Agriculture |
|---|
|
FUND(S):
General Revenue Fund, local governments
Sources of Revenue:
General Fund local property tax revenue
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 relates to allowing for a reduction in property tax for certain farmland in this state.
The provisions of this bill would provide farm valuation treatment to a farm property owned by a corporation that does not meet the 50 percent threshold to meet the requirement that the corporation’s principal activity is the business of farming. The 50 percent principal activity threshold would be replaced with a requirement that affected property have at “least $20,000 in sales, use or consumption of agricultural products.”
The revenue loss associated with this bill cannot be determined. The bill only changes the method for how the property of a farm is valued for corporations that do not meet the 50 percent threshold.
Additional administrative costs would be minimal.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
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 |
0 |
Explanation of above estimates (including long-range effect):
The provisions of this bill would provide farm valuation treatment to a farm property owned by a corporation that does not meet the 50 percent threshold to meet the requirement that the corporation’s principal activity is the business of farming. The 50 percent principal activity threshold would be replaced with a requirement that affected property have at “least $20,000 in sales, use or consumption of agricultural products.”
The revenue loss associated with this bill cannot be determined. The bill only changes the method for how the property of a farm is valued for corporations that do not meet the 50 percent threshold.
Additional administrative costs would be minimal.
Memorandum
The stated purpose of this bill relates to allowing for a reduction in property tax for certain farmland in this state.
This amendment would allow for the “farm property” owned by a corporation that does not meet “the 50% threshold” for claiming “the reduction in property tax appraisal” to now be eligible for such “reduction in property tax appraisals” when the corporation has “at least $20,000 in sales, use, or consumption of agricultural products on that farm property.”
However, there is no “reduction in property tax appraisal” for farm property. The way the proposed language is written implies that such deduction in property tax is available for farm property, but no such “reduction” exists. Property that presently meets the definition of “farm property” is appraised at the fair and reasonable value of property classified as “farm property.”
The statute does not specify whether the $20,000 minimum on the sale, use or consumption of agricultural products is based upon the gross receipts of the corporation.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov