FISCAL NOTE
Date Requested: February 04, 2026
Time Requested: 05:16 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3120 |
Introduced |
SB735 |
|
|---|
| CBD Subject: |
|
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FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses, Decreases 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 phase out corporate net income tax over 4 years, cutting the tax 25% per year starting tax year 2027.
Per our interpretation, the bill would phase out the Corporation Net income Tax by reducing the tax rate from the current rate of 6.5 percent to 0.0 percent over four years starting with taxable periods beginning on or after January 1, 2027. The applicable tax rates would be as follows: for tax periods beginning on and after January, 1 2027, the tax rate would be 4.875 percent; for tax periods beginning on and after January 1, 2028, the tax rate would be 3.250 percent; for tax periods beginning on and after January 1, 2029, the tax rate would be 1.625 percents: and for tax periods beginning on and after January 1, 2030, there would be no tax imposed.
According to our interpretation, the bill, if passed, would reduce General Revenue Funds by $13.7 million in FY2027, by $82.4 million in FY2028, by $152.9 million in FY2029, by $223 million in FY2030, and by $276 million in subsequent fiscal years. Corporation Net Income Tax collections tend to vary considerably from year to year based on economic conditions.
Additional administrative costs incurred by the State Tax Division would be $38,500 in FY2027 though FY2031. However, passage of the bill would eventually eliminate the corporate net income tax unit of the State Tax Division. Administrative cost reductions by the State Tax Division would be $1.4 million in FY2032 and 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 |
38,500 |
-1,435,500 |
| Personal Services |
0 |
0 |
-1,430,000 |
| Current Expenses |
0 |
0 |
-5,500 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
38,500 |
0 |
| 2. Estimated Total Revenues |
0 |
-13,700,000 |
-275,500,000 |
Explanation of above estimates (including long-range effect):
Per our interpretation, the bill would phase out the Corporation Net income Tax by reducing the tax rate from the current rate of 6.5 percent to 0.0 percent over four years starting with taxable periods beginning on or after January 1, 2027. The applicable tax rates would be as follows: for tax periods beginning on and after January, 1 2027, the tax rate would be 4.875 percent; for tax periods beginning on and after January 1, 2028, the tax rate would be 3.250 percent; for tax periods beginning on and after January 1, 2029, the tax rate would be 1.625 percents: and for tax periods beginning on and after January 1, 2030, there would be no tax imposed.
According to our interpretation, the bill, if passed, would reduce General Revenue Funds by $13.7 million in FY2027, by $82.4 million in FY2028, by $152.9 million in FY2029, by $223 million in FY2030, and by $276 million in subsequent fiscal years. Corporation Net Income Tax collections tend to vary considerably from year to year based on economic conditions.
Additional administrative costs incurred by the State Tax Division would be $38,500 in FY2027 though FY2031. However, passage of the bill would eventually eliminate the corporate net income tax unit of the State Tax Division. Administrative cost reductions by the State Tax Division would be $1.4 million in FY2032 and in subsequent fiscal years.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov