FISCAL NOTE
Date Requested: January 15, 2026
Time Requested: 05:01 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1788 |
Introduced |
SB396 |
|
|---|
| 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 stated purpose of this bill is to create West Virginia Job Training and Placement Act.
According to our interpretation of this bill, retailers organized as tax exempt under section 501(c)(3) of federal code could be eligible to retain up to 75 percent of their consumer sales tax collections from customer sales under certain conditions. The qualified retailer must have annual sales of at least $1 million and must have experience in assisting people with a disability or other barriers to employment with job training and placement services. Sales tax retained is tied to successful job training at a rate of 3 people per $10,000 of tax retained and successful placement of 2.25 people in jobs per $10,000 retained. Any 501(c)(3) organization with clothing sales of no more than $40,000 per year are already exempt from sales tax if the proceeds from such sales are dedicated to the mission of their organization. Passage of this bill as written would have little or no impact on tax collections because no existing 501(c)(3) organization likely has sales tax collections in excess of $1 million.
Additional administrative costs incurred by the State Tax Division would be $255,260 in FY2026 and $196,960 per year in FY2027 and thereafter. Costs are associated with a new mission to oversee local job training and job placement efforts. Other agencies in the State under the Department of Commerce (i.e. Workforce WV) already administer a number of programs with a similar mission.
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 |
255,260 |
196,960 |
196,960 |
| Personal Services |
196,960 |
196,960 |
196,960 |
| Current Expenses |
6,600 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
51,700 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation of this bill, retailers organized as tax exempt under section 501(c)(3) of federal code could be eligible to retain up to 75 percent of their consumer sales tax collections from customer sales under certain conditions. The qualified retailer must have annual sales of at least $1 million and must have experience in assisting people with a disability or other barriers to employment with job training and placement services. Sales tax retained is tied to successful job training at a rate of 3 people per $10,000 of tax retained and successful placement of 2.25 people in jobs per $10,000 retained. Any 501(c)(3) organization with clothing sales of no more than $40,000 per year are already exempt from sales tax if the proceeds from such sales are dedicated to the mission of their organization. Passage of this bill as written would have little or no impact on tax collections because no existing 501(c)(3) organization likely has sales tax collections in excess of $1 million.
Additional administrative costs incurred by the State Tax Division would be $255,260 in FY2026 and $196,960 per year in FY2027 and thereafter. Costs are associated with a new mission to oversee local job training and job placement efforts. Other agencies in the State under the Department of Commerce (i.e. Workforce WV) already administer a number of programs with a similar mission.
Memorandum
The stated purpose of this bill is to create the West Virginia Job Training and Placement Act.
The proposed tax credit would be difficult to administer, as the Consumer Sales and Use Tax is not a tax imposed on retailers, but rather a “trust tax” collected by retailers from their customers and remitted to the State Tax Division.
The Department of Revenue is named as the administrator of this proposed program. The Tax Division (an agency within the Department of Revenue) is the proper agency to collect and administer the State Consumer Sales and Use Tax. Further the head of the Tax Division is the Commissioner, not the Comptroller.
,
The amount of sales tax that may be retained for job training and placement is described as “75 percent of the sales taxes after the first $1 million imposed under this chapter.” While it may be presumed that what is meant is “75 percent of the sales tax imposed on retail sales of $1 million,” the language is imprecise and subject to misinterpretation.
Certain amounts of retained sales tax may be used to “improve infrastructure” during the first year of qualification and “otherwise prepare to provide services described…” Neither activity is defined.
The mechanism of retailers retaining Consumer Sales and Use Tax is potentially problematic and has been disfavored in the past. There is also no internal effective date in this bill.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov