FISCAL NOTE
Date Requested: February 24, 2026
Time Requested: 01:47 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 4081 |
Comm. Sub. |
HB5474 |
|
|---|
| CBD Subject: |
Taxation |
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|
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 create a tax incentive to encourage the continued growth of the outdoor recreation economy in West Virginia to be known as the “Gateway to the Gorge Outdoor Recreation Industry Act.”
0
The provisions of this bill would create tax credits related to business and employment activity within a large geographic area encompassing parts of Lincoln, Kanawha, Boone, Raleigh, Summers, Fayette, Mercer, Greenbrier, Clay and Nicholas Counties; or any county containing any portion of the New River Gorge National Park and Preserve and any municipality or unincorporated community designated by rule of the Tax Commissioner, in consultation with the Tourism Office, based on proximity to the park, visitor access routes, and provision of outdoor recreation related services. Taxpayers are eligible if their activity is engaged in “businesses that facilitate, manufacture or sell products and services for leisure activities that occur outdoors.” The tax credit is equal to 50 percent of the Taxpayer’s total tax liability and applies to any business that either creates five or more jobs associated with the outdoor or recreation industry or makes a $1 million investment on or after July 1, 2026. The total amount of the tax credit may not exceed $1 million in any taxable year. Lastly, the credit may be used for three consecutive years. The business tax credit may apply against corporation net income tax or business and occupation tax. The State business and occupation tax applies only to electric power generators, public utilities and natural gas storage, a group of businesses not closely tied to the outdoor recreation industry. We are unable to quantify the revenue loss associated with these proposed tax credits, but the loss could be of some significance. Most benefits from the 50 percent tax liability tax credit would likely go to multi-state corporations with a business location within the geographic district because the tax credit application is not restricted to business activity within the district.
Additional administrative costs incurred by the State Tax Division would be $46,150 in FY2027 and $22,500 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 |
46,150 |
22,500 |
| Personal Services |
0 |
22,500 |
22,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
0 |
22,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The provisions of this bill would create tax credits related to business and employment activity within a large geographic area encompassing parts of Lincoln, Kanawha, Boone, Raleigh, Summers, Fayette, Mercer, Greenbrier, Clay and Nicholas Counties; or any county containing any portion of the New River Gorge National Park and Preserve and any municipality or unincorporated community designated by rule of the Tax Commissioner, in consultation with the Tourism Office, based on proximity to the park, visitor access routes, and provision of outdoor recreation related services. Taxpayers are eligible if their activity is engaged in “businesses that facilitate, manufacture or sell products and services for leisure activities that occur outdoors.” The tax credit is equal to 50 percent of the Taxpayer’s total tax liability and applies to any business that either creates five or more jobs associated with the outdoor or recreation industry or makes a $1 million investment on or after July 1, 2026. The total amount of the tax credit may not exceed $1 million in any taxable year. Lastly, the credit may be used for three consecutive years. The business tax credit may apply against corporation net income tax or business and occupation tax. The State business and occupation tax applies only to electric power generators, public utilities and natural gas storage, a group of businesses not closely tied to the outdoor recreation industry. We are unable to quantify the revenue loss associated with these proposed tax credits, but the loss could be of some significance. Most benefits from the 50 percent tax liability tax credit would likely go to multi-state corporations with a business location within the geographic district because the tax credit application is not restricted to business activity within the district.
Additional administrative costs incurred by the State Tax Division would be $46,150 in FY2027 and $22,500 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to create a tax incentive to encourage the continued growth of the outdoor recreation economy in West Virginia to be known as the “Gateway to the Gorge Outdoor Recreation Industry Act.”
While the bill attempts to incentivize both businesses and individuals, it fails to provide a mechanism for individuals or pass-through entities to claim the credit.
The bill completely omits any reference to Chapter 11, Article 21 (Personal Income Tax). Because sole proprietors, partnerships, S-corporations, and LLCs pass their tax liability through to their owners’ Personal Income Tax returns, these entities will have no Corporate Net Income Tax liability to offset. Consequently, they will receive no benefit from this credit.
The Committee Substitute allows the credit to offset State Business and Occupation taxes §11-13-1 et seq.). State B&O tax primarily applies to public utilities and gas storage, not to the outdoor recreation businesses targeted by this bill (e.g., slacklining, watersports, shooting).
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov