FISCAL NOTE
Date Requested: January 16, 2026
Time Requested: 03:12 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2149 |
Introduced |
HB4479 |
|
|---|
| CBD Subject: |
Agriculture; 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 provide tax credits to encourage in-state production of value-added forest products.
According to our interpretation, this bill encourages in-state production of value-added wood products by providing tax credits to manufacturers that materially transform West Virginia harvested roundwood into qualified non-roundwood products. The proposed credit may be applied to Corporation Net Income Tax or Personal Income Tax for owners of pass-through entities. If a manufacturer begins new operations or completes a qualifying expansion, they may elect a temporary enhanced tax credit for five calendar years at a maximum of $2.5 million per facility per calendar year. For an expansion, the enhanced credit only applies in annual green tons consumed above the facility’s five-year production average preceding the expansion. The annual cap for the standard credit is $1.25 million per facility. There are several existing facilities in West Virginia that would qualify for at least the standard credit of up $1.25 million per year. Most tax credits would go to existing manufacturers within the State without any requirement for enhancement of current operations. Corporation Net Income Tax and Personal Income Tax offsets may vary significantly from the proposed credit amounts based on the business activity of the qualified taxpayer. Even though the loss would be of some significance, we would be unable to fully quantify the loss to the General Revenue Fund in FY2027 and thereafter.
Additional administrative costs incurred by the State Tax Department would be $46,150 in FY2026 and $22,500 per year in FY2027 and thereafter.
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 |
1,650 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
22,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, this bill encourages in-state production of value-added wood products by providing tax credits to manufacturers that materially transform West Virginia harvested roundwood into qualified non-roundwood products. The proposed credit may be applied to Corporation Net Income Tax or Personal Income Tax for owners of pass-through entities. If a manufacturer begins new operations or completes a qualifying expansion, they may elect a temporary enhanced tax credit for five calendar years at a maximum of $2.5 million per facility per calendar year. For an expansion, the enhanced credit only applies in annual green tons consumed above the facility’s five-year production average preceding the expansion. The annual cap for the standard credit is $1.25 million per facility. There are several existing facilities in West Virginia that would qualify for at least the standard credit of up $1.25 million per year. Most tax credits would go to existing manufacturers within the State without any requirement for enhancement of current operations. Corporation Net Income Tax and Personal Income Tax offsets may vary significantly from the proposed credit amounts based on the business activity of the qualified taxpayer. Even though the loss would be of some significance, we would be unable to fully quantify the loss to the General Revenue Fund in FY2027 and thereafter.
Additional administrative costs incurred by the State Tax Department would be $46,150 in FY2026 and $22,500 per year in FY2027 and thereafter.
Memorandum
The stated purpose of this bill is to provide tax credits to encourage in-state production of value-added forest products.
This bill defines an expansion as “a measurable increase in annual production capacity or a new production line that processes West Virginia sourced wood into qualified non-roundwood products”. The word “measurable” is not defined so it potentially creates a low threshold to qualify for the enhanced credit. This bill also does not have an effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov