Personal Taxes

Justice speaks up for the home, the Senate’s personal revenue tax plan, and the information, sports activities, jobs finances

Governor Jim Justice answers questions during a virtual town hall on tax reform on Tuesday. (Courtesy photo of the WV Governor’s Office)

CHARLESTON – Governor Jim Justice announced on Wednesday that he is not a fan of House of Delegates or Senate plans to phase out income tax. The judiciary is also unhappy with the Senate’s proposed cuts to its budget.

On Wednesday afternoon, Justice spoke on the phone that he will be fine if the House and Senate want to make changes to his original proposal to cut individual income tax by 60 percent, but both plans go in two vastly different directions.

“I’ve said over and over again that I haven’t set anything in stone that needs to be in a certain way.” Justice said. “I think we should make it big.”

House Bill 2027 and Senate Bill 600, the governor’s tax reform plan, never left the committee in time for Wednesday’s crossover day. The daily bills must be passed on from one chamber to another. The plan includes a 60 percent reduction in income tax and a tax break for residents who earn less than $ 35,000 per year.

Justice’s entire tax proposal and tax break would cut state tax revenues by $ 1.088 billion. The judiciary proposed tax increases of $ 902.6 million to fund the income tax cut, including increasing the consumer and usage tax rate from 6 percent to 7.9 percent. Creation of a tiered settlement tax for fossil fuels; a new tax on certain luxury goods; and increased taxes on cigarettes, tobacco products, e-cigarettes, beer, wine, liquor, and soda.

The judiciary would also remove sales tax exemptions from professional services such as legal services, accountants, computer hardware and software, and other categories.

The House passed House Bill 3300 on Monday, abolishing income tax for its first full year and annually until the $ 150 million tax is removed. The House version includes an Income Tax Reduction Fund, which siphons off tax revenue from specific revenue streams and existing revenue streams to accelerate tax cuts while encouraging lower government spending.

A report released Tuesday by the bipartisan tax foundation estimated that the House’s plan would take anywhere from 11 to 17 years to phase out income tax entirely, but it does not include tax increases.

“The house plan really isn’t getting big at all … it doesn’t accomplish all of the things that need to be accomplished” Justice said. “Nobody is going to pick up and move to West Virginia at this point because they don’t believe it. In practice, this plan would likely take 20 years to materialize, and it just isn’t believable right now. “

The Senate Finance Committee changed HB 3300 to create its own income tax plan that seeks to marry off portions of the House and Governor’s plans. The Senate plan would cut income tax rates by more than 50 percent, even for small businesses and sole proprietorships, but not for investment income. The plan would cut income tax revenues by $ 1.09 billion.

To pay for the personal income tax cut, the Senate version of HB 3300 would increase consumer sales and consumption tax from 6 percent to 8.5 percent. It would also remove sales tax exemptions for services commonly used by businesses and tax some at lower rates.

Other tax increases in the Senate version include reintroducing the food tax to 2.5 percent; Taxation of ready meals at 8.5 percent; a 4.3 percent tax on short-term accommodation; an 8.5 percent tax on contingent liabilities; and the creation of a new lottery scratch game.

Justice said he was not informed or consulted about the Senate version of HB 3300. He described the Senate plan as an attempt to keep special interest groups who opposed his plan happy while advocating more work with West Virginians.

“I don’t know why the Senate on earth would come up with its own plan without ever picking up the phone and calling.” Justice said. “Your plan really just puts the whole burden right at the foot of those who are likely to have problems whether they like it or not.

“Basically, you let the swamp run the show, not the people in West Virginia run the show.” Justice continued. “So everyone gets off scot-free and the folks on incomes less than $ 35,000 get hammered.”

The judiciary also criticized the budget made available by the Senate Finance Committee on Wednesday afternoon. Senate Bill 125 offsets the budget by cutting $ 104.6 million, including cuts to Justice’s substance abuse and vocational training program, Jobs and Hope, the Communities in Schools program, and four- and two-year colleges and universities.

“I just do not understand” Justice said. “I really ask all of my colleagues – Republicans, Democrats, Independents – everyone. The only thing we have to do is keep in touch with people. I’m not here to do what I personally want to do for Jim Justice. I am right there to do what is right for people and what people want to do. “

Corporate groups and tax reform organizations have spoken out against the governor’s plan in recent weeks. They claim his plan will not lower the personal income tax rates used by small businesses and sole proprietorships and that the tax hike will hurt them.

Only 10 days left until the April 10th session ends. The judiciary hopes that a compromise can be reached in good time. The judiciary is also not opposed to a special session to conclude a personal income tax treaty between him, the legislature and the business community. But the judiciary believes the state must act quickly while the nation’s eyes are on West Virginia.

“I am open to anything that only helps make good things happen for our people. That’s out of the question. “ Justice said. “When people can listen to common sense and we can move forward and work together, that’s great. The biggest handicap to returning is every day we delay with everyone who looks at us. Our moment will pass. “

Steven Allen Adams can be reached at

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