FISCAL NOTE
Date Requested: January 15, 2026
Time Requested: 01:50 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1354 |
Introduced |
SB156 |
|
|---|
| CBD Subject: |
Real and Personal Property; 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 streamline the motor vehicle property tax adjustment by providing a refund within 30 days of paying your taxes.
Per our interpretation, the bill would modify the language of the “Motor vehicle property tax adjustment credit” so that eligible taxpayers would receive a refund of ad valorem motor vehicle property taxes timely paid instead of a refundable tax credit to be claimed on their annual return. The bill outlines the reimbursement process stating that the Sheriff’s Office shall submit a weekly report to the Tax Division providing information on the eligible taxpayers who are entitled to a refund. The refund is to be made within 30 days of payment by the eligible taxpayer of the tax. The refund is to be provided through a check sent by mail and distributed by the State Treasurer’s Office, or a direct deposit.
According to our interpretation, the bill, if passed, would reduce General Revenue Fund collections by up to $30 million per year beginning in FY2027. Tax Division data indicates that the amount of Motor Vehicle Credit being claimed on returns is less than 80 percent of the credit available. If all eligible tax paid was automatically refunded, as per the requirements of this bill, then 100 percent of the available credit would be refunded.
Additional administrative costs incurred by the State Tax Division would be $306,250 in FY2026 and $2,650,150 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 |
437,250 |
2,781,150 |
2,781,150 |
| Personal Services |
381,150 |
381,150 |
381,150 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
6,600 |
0 |
0 |
| Other |
49,500 |
2,400,000 |
2,400,000 |
| 2. Estimated Total Revenues |
0 |
-30,000,000 |
-30,000,000 |
Explanation of above estimates (including long-range effect):
Per our interpretation, the bill would modify the language of the “Motor vehicle property tax adjustment credit” so that eligible taxpayers would receive a refund of ad valorem motor vehicle property taxes timely paid instead of a refundable tax credit to be claimed on their annual return. The bill outlines the reimbursement process stating that the Sheriff’s Office shall submit a weekly report to the Tax Division providing information on the eligible taxpayers who are entitled to a refund. The refund is to be made within 30 days of payment by the eligible taxpayer of the tax. The refund is to be provided through a check sent by mail and distributed by the State Treasurer’s Office, or a direct deposit.
According to our interpretation, the bill, if passed, would reduce General Revenue Fund collections by up to $30 million per year beginning in FY2027. Tax Division data indicates that the amount of Motor Vehicle Credit being claimed on returns is less than 80 percent of the credit available. If all eligible tax paid was automatically refunded, as per the requirements of this bill, then 100 percent of the available credit would be refunded.
Additional administrative costs incurred by the State Tax Division would be $306,250 in FY2026 and $2,650,150 in subsequent fiscal years.
Implementation of this bill will require development of a new process and staffing for a new tax unit to receive the weekly reports from 55 sheriff offices and prepare the data to initiate refunds to approximately 600,000 taxpayers. The local sheriff offices would not have social security numbers or direct deposit account information. Therefore, it would be necessary for the refunds to be paid by check. The estimated cost to process, reconcile, and issue the checks is $4 per check.
There would also be costs for each of the 55 county sheriffs to administer this program. Significant additional costs would be absorbed by these offices, including additional staffing and overtime during property tax season. We recommend that the Association of Counties provide input regarding what those costs may entail.
The State of Virginia offers a similar personal property tax relief program to that offered in West Virginia but with significantly more certainty and less compliance and administrative costs. A description of the Virginia Plan follows. Virginia created the Personal Property Tax Relief Act of 1998 (PPTRA) targeted toward the reduction or elimination of personal property taxes on motor vehicles owned by individuals. The measure provided 100 percent relief for vehicles valued at $1,000 or less and partial relief for all non-business use vehicles with a weight of no more than 10,000 pounds on the first $20,000 of a vehicle’s value.
The 2004 Virginia General Assembly approved additional legislation that capped statewide Personal Property Tax reimbursements at $950 million (Virginia’s population is slightly more than 5 times West Virginia’s population) in FY 2007 and beyond. Tax relief is automatically applied at the local level to your personal property tax bill once you meet the outlined criteria. The Commonwealth shall pay a total of $950 million for each tax year in reimbursements to localities for providing the required tangible personal property tax relief on qualifying vehicles. Each county's, city's, or town's share of the $950 million for each such tax year shall be determined pro rata based upon the actual payments to such county, city, or town.
Memorandum
The stated purpose of this bill is to streamline the motor vehicle property tax adjustment by providing a refund within 30 days of paying your taxes.
The bill modifies W.Va. Code§11-13MM-3 to add a new requirement that the Tax Division issue refunds of West Virginia ad valorem property tax timely paid on the value of a motor vehicle by an eligible taxpayer within 30 days of payment of the tax to a county sheriff. Currently under W.Va. Code §11-13MM-3, taxpayers pay motor vehicle personal property tax at the county level and then claim a refundable credit on their annual return. The bill changes the word ‘credit” to “refund”. This renaming is a misnomer, as the Tax Division cannot really “refund” money that it never received.
The bill strikes out current provisions for the credit under W.Va. Code §11-13MM-3(d) and adds a paragraph outlining the reimbursement process for the tax refund. It provides that the local county sheriff’s office is to, under the authority of §7-5-1, provide a weekly report of the taxpayers eligible for the refund. W. Va. Code §7-5-1 does not address any authority of the sheriff to provide a weekly report. The bill’s added language requires the Tax Division to make reimbursement to an eligible taxpayer within 30 days of payment. The time allowed for the Tax Division to make the refund will necessarily be less than 30 days, given the prerequisites of the sheriff first receiving and recording payment and then notifying the Tax Division. The bill requires reimbursement by mailed check by the State Treasurer’s Office or by direct deposit.
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov