FISCAL NOTE
Date Requested: April 04, 2025
Time Requested: 08:42 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3989 |
Comm. Sub2 |
SB834 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
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 purpose of this bill relates to the tax credit for qualified rehabilitated buildings investment.
Per our interpretation, the bill would create a new article, §11-13NN, “The West Virginia Historic Rehabilitated Building Tax Credit Act” and provide a sunset for the current rehabilitation credits outlined under §11-21-8a through 8h and §11-24-23a through 23g. The new article reorganizes and clarifies the credit’s requirements, sets forth procedures to claim the credit, and provides for the recapture of the credit.
For “Certified Historic Structures”, the credit percentage is retained at 25 percent of qualified rehabilitation expenditures. The credit percentage for “Residential Certified Historic Structures” is increased from 20 percent to 25 percent of eligible rehabilitation expenses in the rehabilitation of a certified historic structure. In addition, the carry forward period for “Residential Certified Historic Structures” is increased from the next 5 years to the next 10 tax years following the first tax year for which the credit entitlement is authorized.
The provisions of §11-13NN are effective for all applications received by the State Historic Preservation Officer on or after June 30, 2025, and any prior application for which Part 3-Request for Certification of Completed Work, including amendments, was not physically received by the State Historic Preservation Officer prior to June 30, 2025.
Based on our interpretation, the proposed legislation, if passed, would cause an average decline in General Revenue Fund collections of roughly $70,000 per year beginning in FY2026. The decline is attributable to the increased credit percentage for “Residential Certified Historic Structures” and some anticipated growth in usage of the credit. Claims related to “Residential Certified Historic Structures” vary considerably from year to year; therefore, an average decline is used for estimation purposes.
Additional administrative costs incurred by the State Tax Department would be $1,100 in FY2025 and $44,000 in subsequent fiscal years.
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 |
1,100 |
44,000 |
44,000 |
| Personal Services |
0 |
44,000 |
44,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
1,100 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-70,000 |
-70,000 |
Explanation of above estimates (including long-range effect):
Per our interpretation, the bill would create a new article, §11-13NN, “The West Virginia Historic Rehabilitated Building Tax Credit Act” and provide a sunset for the current rehabilitation credits outlined under §11-21-8a through 8h and §11-24-23a through 23g. The new article reorganizes and clarifies the credit’s requirements, sets forth procedures to claim the credit, and provides for the recapture of the credit.
For “Certified Historic Structures”, the credit percentage is retained at 25 percent of qualified rehabilitation expenditures. The credit percentage for “Residential Certified Historic Structures” is increased from 20 percent to 25 percent of eligible rehabilitation expenses in the rehabilitation of a certified historic structure. In addition, the carry forward period for “Residential Certified Historic Structures” is increased from the next 5 years to the next 10 tax years following the first tax year for which the credit entitlement is authorized.
The provisions of §11-13NN are effective for all applications received by the State Historic Preservation Officer on or after June 30, 2025, and any prior application for which Part 3-Request for Certification of Completed Work, including amendments, was not physically received by the State Historic Preservation Officer prior to June 30, 2025.
Based on our interpretation, the proposed legislation, if passed, would cause an average decline in General Revenue Fund collections of roughly $70,000 per year beginning in FY2026. The decline is attributable to the increased credit percentage for “Residential Certified Historic Structures” and some anticipated growth in usage of the credit. Claims related to “Residential Certified Historic Structures” vary considerably from year to year; therefore, an average decline is used for estimation purposes.
Additional administrative costs incurred by the State Tax Department would be $1,100 in FY2025 and $44,000 in subsequent fiscal years.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov