FISCAL NOTE
Date Requested: February 16, 2026
Time Requested: 04:33 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3568 |
Introduced |
HB5606 |
|
|---|
| CBD Subject: |
|
|---|
|
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 establish the “Stay in State Tax Credit” that allows residents of this state who remain in state after graduating with an undergraduate or associate degree from a state institution to be granted a tax credit for the total cost of tuition and interest for student loans used to obtain their degree. The bill provides this tax credit against personal income tax in West Virginia and is awarded over a 10-year period. The bill provides that employers are also allowed to claim the credit for employees that qualify for the credit. The bill provides that in-state high schools, colleges, and universities are required to inform and assist students with obtaining the tax credit.
According to our interpretation, this bill would allow a credit of up to 100 percent of normally scheduled loan payments against Personal Income Tax for student loan payments made by graduates who work in West Virginia. A portion of the credit would be refundable for certain degree programs. In addition, a 100 percent loan payment credit is allowed for employers who make loan payments for their employees. These credits are available for loan repayments for a period of up to ten years. The State Tax Division does not have sufficient information to accurately estimate the amount of credits that would be taken for student loan payments. We are unable to accurately estimate the revenue loss to the General Revenue Fund attributable to passage of this bill, but the loss would be very substantial given that student loans would be effectively paid by the State through the proposed tax credits.
Administrative costs to the State Tax Division would be $124,300 in FY2027 and $99,000 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 |
0 |
124,300 |
99,000 |
| Personal Services |
0 |
99,000 |
99,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
3,300 |
0 |
| Other |
0 |
22,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, this bill would allow a credit of up to 100 percent of normally scheduled loan payments against Personal Income Tax for student loan payments made by graduates who work in West Virginia. A portion of the credit would be refundable for certain degree programs. In addition, a 100 percent loan payment credit is allowed for employers who make loan payments for their employees. These credits are available for loan repayments for a period of up to ten years. The State Tax Division does not have sufficient information to accurately estimate the amount of credits that would be taken for student loan payments. We are unable to accurately estimate the revenue loss to the General Revenue Fund attributable to passage of this bill, but the loss would be very substantial given that student loans would be effectively paid by the State through the proposed tax credits.
Administrative costs to the State Tax Division would be $124,300 in FY2027 and $99,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to establish the “Stay in State Tax Credit” that allow residents of this state who remain in state after graduating with an undergraduate or associate degree from a state institution to be granted a tax credit for the total cost of tuition and interest for student loans used to obtain their degree. The bill provides this tax credit against personal income tax in West Virginia and is awarded over a 10-year period. The bill provides that employers are also allowed to claim the credit for employees that qualify for the credit. The bill provides that in-state high schools, colleges, and universities are required to inform and assist students with obtaining the tax credit.
The given definitions can be confusing and may be more restrictive than intended. The bill appears to use the terms “taxpayer” and “qualified individual” interchangeably, with neither term defined.
A “qualified individual” or “taxpayer” may claim a credit based on loan payments made to a lender with respect to loans that are part of the taxpayer’s financial aid package. The credit is non-refundable except for graduates of STEM (Science, Technology, Engineering and Math) programs. The bill allows an employer who makes payments on behalf of a qualified graduate to qualify for the credit. However, the bill does not designate against which tax an employer could take the credit.
The bill contains no effective date, and there is a plethora of dates for qualification throughout the bill.
Person submitting Fiscal Note: Peter Shirley
Email Address: RADfiscal@wv.gov