FISCAL NOTE
Date Requested: January 28, 2026
Time Requested: 04:51 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3033 |
Introduced |
SB646 |
|
|---|
| 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.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The stated purpose of this bill is to modify certain requirements for eligibility for West Virginia Employer-Provided or Sponsored Child Care Tax Credit program.
According to our interpretation, this bill would increase the credits for capital investment in a childcare facility and operating costs of a childcare facility from 50 percent to 100 percent. The current tax credits related to capital investments and operating costs are at 50 percent. Increasing the tax credits to 100 percent effectively transfers the full cost of qualified activity to the State.
Passage of this bill would likely yield a reduction in the General Revenue Fund of some significance beginning in FY2027 largely due to the expansion of the current tax credits related to capital investment and operating costs of a childcare facility. The current tax credits became effective as of July 1, 2022. Although there has been interest in these credits, there have been limited claims to date. As structured, the tax credits are anticipated to be claimed by some larger employers, particularly nonprofit corporations.
Additional administrative costs incurred by the State Tax Department would be $22,000 in FY2026, $12,650 in FY2027, and $11,000 per year in FY2028 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 |
22,000 |
12,650 |
11,000 |
| Personal Services |
0 |
11,000 |
11,000 |
| Current Expenses |
0 |
1,650 |
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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
According to our interpretation, this bill would increase the credits for capital investment in a childcare facility and operating costs of a childcare facility from 50 percent to 100 percent. The current tax credits related to capital investments and operating costs are at 50 percent. Increasing the tax credits to 100 percent effectively transfers the full cost of qualified activity to the State.
Passage of this bill would likely yield a reduction in the General Revenue Fund of some significance beginning in FY2027 largely due to the expansion of the current tax credits related to capital investment and operating costs of a childcare facility. The current tax credits became effective as of July 1, 2022. Although there has been interest in these credits, there have been limited claims to date. As structured, the tax credits are anticipated to be claimed by some larger employers, particularly nonprofit corporations.
Additional administrative costs incurred by the State Tax Department would be $22,000 in FY2026, $12,650 in FY2027, and $11,000 per year in FY2028 and thereafter.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
The stated purpose of this bill is to modify certain requirements for eligibility for West Virginia Employer-Provided or Sponsored Child Care Tax Credit program.
The addition of the phrase “or financial sponsorship by an employer” makes the subdivision grammatically incorrect. The “or” should be omitted to read “financially sponsored by an employer”.
It is unclear what purpose is served by excepting “employer sponsored” child-care facilities to the proximity or employee usage thresholds when both thresholds have been amended by bill to be more accommodating to “employer sponsored” child-care facilities. Furthermore, if “employee sponsored” child-care facilities were excepted from the employee usage threshold, could employers receive the tax incentives for sponsoring anyone’s childcare, not just employees?
This bill is also inconsistent with hyphens. Employer-sponsored and child-care are hyphenated in some parts of the bill, however, other parts of this bill are missing hyphens. This bill is missing an internal effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: radfiscal@wv.gov