West Virginia HB 5177: Sales tax rebate for qualifying materials used in the construction of modest homes of 1 600 square feet or less

Bill Text

WEST VIRGINIA LEGISLATURE

2026 REGULAR SESSION

FISCAL NOTE

Introduced

House Bill 5177

By Delegates G. Howell, Masters, Burkhammer, Jennings, Fehrenbacher, Hillenbrand, Heckert, Green, Canterbury, Campbell, and Hite

[Introduced February 04, 2026; referred to the Committee on Finance]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding a new article, designated §11-15C-1, §11-15C-2, §11-15C-3, §11-15C-4, §11-15C-5, §11-15C-6, §11-15C-7, §11-15C-8, §11-15C-9, and §11-15C-10, relating to creating a state sales tax rebate for qualifying materials used in the construction of modest homes of 1,600 square feet or less, to limit the rebate to the state six percent sales tax, to permit voluntary municipal participation, to establish fixed material quantity limits, to require in state purchasing and affidavits, and to grant rule making and inspection authority to the State Tax Department.

Be it enacted by the Legislature of West Virginia:



article 15C. rebate for qualified building material and inspection costs.

§11-15C-1. Legislative findings.

The Legislature finds that West Virginia faces a shortage of modest housing and that the state consumers sales and service tax increases construction costs. The Legislature further finds that a narrowly tailored rebate of the state portion of the sales tax tied to defined material quantities, in state purchases, and inspections will promote housing construction while protecting the tax base and supporting West Virginia suppliers.

§11-15C-2. Definitions.

For purposes of this article:

(a) "Eligible modest dwelling" means a newly constructed detached single family residence located in West Virginia that meets all of the following requirements:

(1) Heated living space of 1,600 square feet or less above grade

(2) A basement is optional -- If constructed, the basement shall be unfinished and excluded from heated living space;

(3) A lot size of not less than 0.5 acre and not more than 1.0 acre;

(4) Standard stock windows and doors only – custom sizes are excluded; and

(5) Constructed for retail sale and sold to an end purchaser.

(b) "Builder" means a person or entity licensed to do business in West Virginia that constructs an eligible modest dwelling for retail sale.

(c) "In state supplier" means a seller with a physical place of business located in West Virginia that collects and remits West Virginia sales tax.

(d) "Eligible materials" means only those materials listed in §11-15C-6 of this code, purchased within the stated quantity limits and incorporated into the eligible modest dwelling.

§11-15C-3. State sales tax rebate created.

(a) A builder may apply for a rebate equal to the state six percent consumers sales and service tax paid on eligible materials.

(b) The rebate applies only to the state portion of the tax. Municipal sales taxes are excluded unless a municipality voluntarily participates under §11-15C-4 of this code.

(c) The rebate may be claimed only after the dwelling is sold, inspected, and all documentation is approved.

§11-15C-4. Voluntary municipal participation.

(a) A municipality that imposes a municipal sales tax may elect to participate in this program by ordinance.

(b) A participating municipality may authorize a rebate of all or part of its municipal sales tax on eligible materials.

(c) The State Tax Department shall administer any municipal rebate authorized under this section.

§11-15C-5. Purchase and documentation requirements.

(a) All eligible materials must be purchased from an in state supplier.

(b) Itemized receipts showing West Virginia sales tax paid are required.

(c) Records must be retained for 60 months from the date the rebate is issued.

(d) Materials purchased from out of state suppliers are not eligible.

§11-15C-6. Eligible materials and quantities.

(a) Sheathing and framing:

(1) OSB or plywood, four feet by 8 feet sheets;

(A) Roof sheathing: 76 sheets;

(B) Wall sheathing: 43 sheets;

(C) Subfloor, three-quarter inch T and G if used: 55 sheets; and

(D) Total maximum: 174 sheets.

(2) Dimensional lumber, two inches by four-inches, eight feet equivalent, up to a maximum of 475 pieces.

(3) Roof trusses, stock trusses: Up to a maximum of 35 trusses whether roof trusses, stock trusses, or a combination of the two.

(b) Roofing:

(1) Up to a maximum of 22 squares of Asphalt shingles or 24 square metal roofing panels; 

(2) Up to a maximum of three rolls of roofing underlayment;

(3) Up to a maximum of two rolls at 36-inches width of ice and water shield; and

(4) Up to a maximum of 23 pieces of 10-foot lengths of Drip edge.

(c) Exterior finish:

(1) Siding: up to a maximum of 14 squares;

(2) Housewrap: up to a maximum of two rolls;

(3) Soffit: up to a maximum of 350 square feet; and

(4) Fascia and exterior trim, 10 feet lengths: up to a maximum of 31 pieces

(d) Foundation, if constructed: If a basement or foundation is constructed, the following quantities apply.

(1) Concrete masonry uni