FISCAL NOTE
Date Requested: January 22, 2026
Time Requested: 10:45 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1475 |
Comm. Sub. |
HB4028 |
|
|---|
| 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 provide contractors of school facilities with a tax exemption on construction materials.
According to our interpretation of this bill, purchases of building materials, tangible personal property, and services by a construction contractor or construction subcontractor used in the construction of a public-school facility would be exempt for the State Consumer Sales and Use Tax. Passage of this bill would reduce General Revenue Fund collections by $1.5 million per year and municipal sales and use tax collections by $125,000 per year in FY2027 and thereafter.
This proposal would add some complexity to tax compliance for contractors with the proposed tax exemption. Therefore, any net savings on school construction would be a bit less than the value of the new sales tax exemption. The State currently dedicates more than $32 million per year in Consumers Sales Tax collection towards School Building Authority funding for school construction. An increase in the current dedication would be more efficient if the desire is to increase school funds for construction.
Additional administrative costs incurred by the State Tax Department would be $1,100 in FY2027.
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 |
1,100 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
1,100 |
0 |
| 2. Estimated Total Revenues |
0 |
-1,500,000 |
-1,500,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation of this bill, purchases of building materials, tangible personal property, and services by a construction contractor or construction subcontractor used in the construction of a public-school facility would be exempt for the State Consumer Sales and Use Tax. Passage of this bill would reduce General Revenue Fund collections by $1.5 million per year and municipal sales and use tax collections by $125,000 per year in FY2027 and thereafter.
This proposal would add some complexity to tax compliance for contractors with the proposed tax exemption. Therefore, any net savings on school construction would be a bit less than the value of the new sales tax exemption. The State currently dedicates more than $32 million per year in Consumers Sales Tax collection towards School Building Authority funding for school construction. An increase in the current dedication would be more efficient if the desire is to increase school funds for construction.
Additional administrative costs incurred by the State Tax Department would be $1,100 in FY2027.
Memorandum
The stated purpose of this bill is to provide contractors of school facilities with a tax exemption on construction materials.
This bill defines “building materials” and “school facility” but does not define a “public school facility”. Therefore, there may be issues in determining what type of facility may qualify. The definition for “building materials” is relatively broad, and therefore, may create issues with administering this tax exemption.
The Tax Division may need additional time to create a system for vetting which claims may qualify for the Consumer Sales and Use Tax exemption created by this bill.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov