Personal Taxes

All eyes on Home as earnings tax exit keep alive Journal Information

CHARLESTON – A day after the West Virginia Senate passed a hybrid version of an income tax exit that includes new ideas from Governor Jim Justice, the House of Delegates is under pressure to keep the bill moving.

House Bill 3300, the West Virginia Income Tax Exit Bill, was sent back to the House on Thursday after the Senate amendment and passed between 6 and 4 p.m. Wednesday night.

The House had not yet picked up on the Senate message on Thursday, HB 3300, and according to House sources, could not pick up the message at all until Saturday, the last day of the session.

When invoices passed by one body are changed and passed on by the other, the bill goes back to the original body. From there, the body can either agree to the changes, change the bill again (which requires going back to the other body to agree), or reject the other body’s changes and ask it to step back.

If the other body refuses to step back from its amendments, the bill goes to a conference committee where appointed lawmakers meet to resolve differences.

The Senate version of HB 3300 is a combination of Justice’s updated income tax plan presented Monday and the changes made by Senate Finance Committee Chairman Eric Tarr, R-Putnam. The judiciary issued a statement Thursday thanking the Senate for working out a compromise and calling for support for the law.

“I applaud the Senate in every way for stepping on the table and telling a bill that would completely change the status quo for West Virginia,” said Justice. “With my support and the support of the Senate, we are two thirds of the way to make this dream a reality. We will continue to work with Members of the House to get this bill across the line. “

HB 3300, based on the Governor’s Justice 4 All plan and the Tarr amendment, would phase out income tax over a period of years, starting with a 50% reduction in the first year, with future reductions based on the Undesignated revenue will be made in the approved general revenue budget each year beginning January 1, 2022. The cut would result in a loss of $ 818 million in personal income tax revenue.

To fund the tax cut, the Tarr / Justice plan would increase consumer sales and excise duties from 6% to 8%, remove sales tax exemptions from professional services, ready meals and vending machines, tax soft drinks at 8%, and tax services that come at contingent fees result from billing. It also removes tax exemptions for the sale of electronic data processing, computer hardware and software, health and fitness memberships, and broadcast and print advertising.

The plan provides a tax break for individuals and families who earn less than $ 35,000 per year to help mitigate the impact of higher sales tax. It contains a retrofitted tiered severance payment tax for coal, oil and natural gas. The revenue from the updated severance tax, an increase in various tobacco taxes, and revenue from a new lottery scratch card would go to a special fund to expedite the expiry of the income tax.

When Justice first presented its “Justice 4 All” plan on Monday during a summit meeting with the majority and minority leadership of the House and Senate, the members of the Republican House expressed skepticism about the plan. HB 3300, as approved by the House, will translate income tax at $ 150 million annually for several years until the tax is gone without increasing sales or excise taxes or removing exemptions. The severance tax rates were not changed either.

“I’m willing to listen, and that’s important in any debate … but I believe the plan still puts us at a competitive disadvantage against all of our neighbors,” said Eric Householder, chairman of the House Finance Committee, R-Berkeley. “The plan still weighs on those who make the least money. How do I know? Because we still have to offer discounts. If we still have to offer discounts, we are still violating them. “

In a statement Thursday, Doug Skaff, D-Kanawha, and Shawn Fluharty, D-Ohio, also spoke out against the Senate / Justice version of HB 3300.

“The only way to fund this elimination is by increasing existing taxes or creating new taxes,” said Skaff and Fluharty. “This is not a tax cut. This is a tax shift. We are against the plan that the Senate Republicans passed last night. This plan will violate Western Virgins. “

“We will not support a plan that increases taxes on Western Virgins, shifts the tax burden to Western Virgins, or cuts funding from current government programs such as the PROMISE Scholarship, programs for our seniors and funding our schools,” they continued. “We are happy to continue talking about meaningful ways to reduce the tax burden for Western Virgins, but we refuse to accept a plan that simply shifts the tax burden to working Western Virgins.”

The 2021 legislature ends on Saturday at midnight, giving the governor and legislators today and tomorrow the opportunity to reach an agreement that can pass both houses before the hammer falls.

“I continue to encourage the House to be open-minded and stop scaring people by skewing the impact of small tax increases while leaving out the large scale of tax deductions and rebate checks that are also part of the plan,” Justice said. “At the end of the day, everyone will have … more money in their pockets.”

Steven Allen Adams can be reached at sadams@newsandsentinel.com.

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