All Roll Calls
Yes: 127 • No: 1
West VirginiaHB 44182026 Regular SessionHouse
Creating “The Tax Efficiency Act of 2026”
Sponsored By: David McCormick (Republican)
Signed by Governor
§8-13-5
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Bill Overview
Analyzed Economic Effects
8 provisions identified: 4 benefits, 1 costs, 3 mixed.
Cities can give business tax credits
When a city has a business tax, it may grant credits to new or expanding businesses inside its limits. The city decides who qualifies and how much the credit is.
City tax on new cars ends
The law cuts, then ends, city business tax on sales of new cars never registered in an individual’s name. Starting July 1, 2023, the tax is cut by 50%. Starting July 1, 2024, it is cut by another 50% of the total tax. Beginning July 1, 2025, the city tax on these sales is eliminated. Automobiles include gas or electric cars, light‑duty trucks, and SUVs. Motorcycles are excluded.
Fairer rules for city business taxes
If your business works in more than one West Virginia city, state rules divide income and stop the same income from being taxed twice. New or higher city taxes on contracting work apply only to contracts signed after the tax takes effect. A payment is on time if it is postmarked or submitted through the system by the due date. A city must give public utilities written notice by certified mail at least 60 days before a new or higher utility tax starts. Private collectors cannot charge more than 20% of the taxes they collect. City ordinances must follow state‑style rules for assessments, collections, and penalty waivers.
City business tax allowed but capped
The law lets cities tax business activity that the state taxed before July 1, 1987. Cities cannot tax activities the state exempted before that date. City rates cannot be higher than state caps, including 1.0% for some classes and 0.3% for others. These limits keep local B&O taxes within statewide ceilings.
City tax caps for HMOs
For HMOs with a state certificate, city B&O tax is capped at 0.5% on Medicaid and similar program income used for administrative expenses (not claims or provider payments). It is also capped at 0.5% on enrollee or employer income from nonfederal sources. Income from use of real property is not covered by these caps. The cap applies to periods after December 31, 1996, and 1997 payments are not refundable.
City tax on nonprofit business income
Since July 1, 2007, cities may tax income from a charity’s or religious group’s business activities, but only if the IRS taxes that income as unrelated business income. Other charitable income remains outside this city tax.
Very low city tax on aircraft repair
Cities may tax aircraft repair, maintenance, modification, and refurbishing done inside city limits. The rate on this activity is capped at 0.10%. This makes the activity taxable but keeps the city tax very small.
Optional statewide system for city business taxes
The Tax Commissioner runs an optional online system to file and pay city business taxes. Cities choose whether to join and keep audit and collection powers. The system starts only after committed cities together expect over $30 million a year; it then opens on a July 1 at least 12 months after that finding. The state keeps a 1% administrative fee from each participating city’s gross collections. The Commissioner may set rules for onboarding and secure data exchange.
Sponsors & Cosponsors
Sponsor
David McCormick
Republican • House
Cosponsors
Ryan Browning
Republican • House
Vernon Criss
Republican • House
Bob Fehrenbacher
Republican • House
Joe Funkhouser
Republican • House
Jonathan Kyle
Republican • House
Jordan Maynor
Republican • House
Clay Riley
Republican • House
Roll Call Votes
Senate vote • 3/13/2026
Passed Senate (Roll No. 535)
Yes: 34 • No: 0
House vote • 3/4/2026
Passed House (Roll No. 286)
Yes: 93 • No: 1
Bill Text
Committee Substitute
Engrossed
Enrolled
Introduced Version
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