FISCAL NOTE
Date Requested: January 19, 2026
Time Requested: 03:08 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2823 |
Introduced |
SB403 |
|
|---|
| CBD Subject: |
Economic Development; Governor -- Bills Requested By; 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 expand the definition of tourism attraction to include lodging facility for purposes of the Tourism Development Act credit.
Under current law, the Tourism Development Tax Credit does not apply to a lodging facility unless the lodging facility investment meets one of three separate criteria for inclusion:
1. The facility represents less than 50 percent of total project approved costs or is located on recreational property owned or leased by the state or federal government.
2. The facility’s investment requires substantial rehabilitation of a property that might qualify for the Historic Rehabilitated Buildings Investment Tax Credit or is within a national register historic district.
3. The facility involves a full-service lodging facility with at least 500 guest rooms and with minimum investment of at least $10 million.
The proposed legislation removes the three separate possible criteria for qualification of lodging facilities under the Tourism Development Tax Credit and allows all lodging facilities constructed within the State to potentially qualify for tax credits based on new qualified investments. Qualifications include approved costs of more than $1 million and a requirement that at least 25 percent of visitors come from other states. The tax credit equals 25 percent of approved costs or 35 percent of approved costs for projects near surface mining activity or encompassing historic rehabilitation activities.
The tax credits may be claimed against consumer sales tax collections over base year collections prior to the investment. The initial credits are pro-rated for use over a ten-year period. Remaining unused tax credits after ten years may be used over an additional 15-year period. Any tax credits remaining after 25 years are forfeited. The value of these tax credits tends to be limited more by the amounts of sales tax collected rather than the amount of actual tax credits generated by investment.
Passage of this bill would increase the amount of Tourism Development Tax Credit claims over time based on new lodging construction activities. The current average annual cost of the Tourism Development Tax Credit is roughly $4 million. The proposed expansion of the tax credit to general lodging investments will gradually result in some not readily quantifiable increase in future tax credit claims.
Additional administrative costs incurred by the State Tax Department would be $5,500 in FY2026 and $11,250 in subsequent fiscal years.
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 |
5,500 |
11,250 |
11,250 |
| Personal Services |
0 |
11,250 |
11,250 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
5,500 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Under current law, the Tourism Development Tax Credit does not apply to a lodging facility unless the lodging facility investment meets one of three separate criteria for inclusion:
1. The facility represents less than 50 percent of total project approved costs or is located on recreational property owned or leased by the state or federal government.
2. The facility’s investment requires substantial rehabilitation of a property that might qualify for the Historic Rehabilitated Buildings Investment Tax Credit or is within a national register historic district.
3. The facility involves a full-service lodging facility with at least 500 guest rooms and with minimum investment of at least $10 million.
The proposed legislation removes the three separate possible criteria for qualification of lodging facilities under the Tourism Development Tax Credit and allows all lodging facilities constructed within the State to potentially qualify for tax credits based on new qualified investments. Qualifications include approved costs of more than $1 million and a requirement that at least 25 percent of visitors come from other states. The tax credit equals 25 percent of approved costs or 35 percent of approved costs for projects near surface mining activity or encompassing historic rehabilitation activities.
The tax credits may be claimed against consumer sales tax collections over base year collections prior to the investment. The initial credits are pro-rated for use over a ten-year period. Remaining unused tax credits after ten years may be used over an additional 15-year period. Any tax credits remaining after 25 years are forfeited. The value of these tax credits tends to be limited more by the amounts of sales tax collected rather than the amount of actual tax credits generated by investment.
Passage of this bill would increase the amount of Tourism Development Tax Credit claims over time based on new lodging construction activities. The current average annual cost of the Tourism Development Tax Credit is roughly $4 million. The proposed expansion of the tax credit to general lodging investments will gradually result in some not readily quantifiable increase in future tax credit claims.
Additional administrative costs incurred by the State Tax Department would be $5,500 in FY2026 and $11,250 in subsequent fiscal years.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov