FISCAL NOTE
Date Requested: February 05, 2026
Time Requested: 04:43 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3540 |
Introduced |
SB761 |
|
|---|
| CBD Subject: |
Agriculture; Economic Development; 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 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 to $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):
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 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 to $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
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 provide tax credits to encourage in-state production of value-added forest products.
The enhanced portion of this proposed tax credit applies to manufacturers that begin new operations or expansions. An expansion is defined as “a measurable increase in annual production capacity of 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 does not have an effective date.
Person submitting Fiscal Note: Mark Muchow
Email Address: radfiscal@wv.gov