BY KATELYN CAMPBELL, COMMUNITY DEVELOPMENT POLICY VISTA, THE HUB
Each year, the Legislature takes up a number of initiatives designed to grow and promote West Virginia’s economy. There are a wide range of tools available to encourage economic development, each with its own costs and benefits.
One of the most popular tools legislators are proposing in the 2018 Session is the use of tax credits. So far this Session, they have introduced 26 bills related to them.
Tax credits are often used by governments to encourage development by lowering overall startup costs. For example, during the second Special Session in 2017, the Legislature authorized an increase in the State Historic Rehabilitation Tax Credit, which incentivizes businesses and developers to take on historic restoration projects by decreasing the net cost of rehabilitation to the developer.
While tax credits are successful tools for nudging potential developers toward specific types of projects, it can often take several years for the state to see a return on their investment. For this reason, Legislators and their staff carefully evaluate each tax credit bill’s fiscal note against the proposed budget to ensure they balance out, and that the return on investment will be worth the wait.
One such tax credit bill, Senate Bill 300 made it out of committee and onto the floor earlier this week – the first tax credit bill introduced this Session to do so.
If enacted, SB 300 would establish a new incentive for businesses who choose to locate their principal headquarters on a post coal mine site. According to the bill, a business could receive a tax credit worth 50% of their capital expenditures (like building costs) for the first five years after relocation.
The bill’s lead sponsor, Ron Stollings of Boone County, proposed similar Legislation last Session to support economic development initiatives on the former Hobet mine site near Danville.
Since SB 300 originated in the Senate Finance committee, it must now be read three times on the floor of the Senate before a vote can be taken. If passed, it will move on to the House to repeat the whole process before being brought to the Governor to be signed into law.
We’ll keep you posted on SB 300’s progress as it makes its way through the Senate towards the House.
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