FISCAL NOTE
Date Requested: January 14, 2026
Time Requested: 04:48 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1512 |
Introduced |
HB4042 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
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 is to exempt from taxation real property used for farming, if the owner-farmer resides on the real property and receives at least 40 percent of his or her income from the farm.
The revenue loss associated with this bill could be roughly $4.8 million a year based on State Tax Division data and information from the Census of Agriculture. The estimated revenue loss would be roughly $1.4 million to the State General Revenue Fund, $2.0 million to local county school boards, and $1.4 million to county commissions. The distribution of estimated cost is based on information from taxes levied as reported in the Classified Assessed Valuations Taxes Levied for 2025 Tax Year publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula. Given normal fluctuations in farm income from one year to the next, farms could be exempt in some years and taxable in other years depending on changes in income ratio.
Additional administrative costs cannot be determined.
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 |
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 |
-4,800,000 |
Explanation of above estimates (including long-range effect):
The revenue loss associated with this bill could be roughly $4.8 million a year based on State Tax Division data and information from the Census of Agriculture. The estimated revenue loss would be roughly $1.4 million to the State General Revenue Fund, $2.0 million to local county school boards, and $1.4 million to county commissions. The distribution of estimated cost is based on information from taxes levied as reported in the Classified Assessed Valuations Taxes Levied for 2025 Tax Year publication of the State Tax Department and the incorporation of the calculation of local property tax share within the State Aid to Schools Formula. Given normal fluctuations in farm income from one year to the next, farms could be exempt in some years and taxable in other years depending on changes in income ratio.
Additional administrative costs cannot be determined.
Memorandum
The stated purpose of this bill is to exempt from taxation real property used for farming, if the owner-farmer resides on the real property and receives at least 40 percent of his or her income from the farm.
The bill does not define the terms “farm” or “farming”. The bill is also unclear as to whether the real property would be exempt if an individual owner-farmer derives more than 40 percent of their income from farm property, but the farmer is married and files jointly and the farm income is less than 40 percent of the couple’s joint income.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov