Personal Taxes

W.Va. Senate provides invoice to decrease revenue tax

CHARLESTON, W.Va. (WSAZ) – A Senate committee in West Virginia passed a bill on Tuesday to lower the state’s income tax.

The Senate Finance Committee passed an amended version of the bill by a 9-8 vote Tuesday night that had nothing to do with the version of Bill 3300, which was passed on Monday and sent to the Senate.

The House version of the bill would cut income tax by $ 150 million annually until personal income taxes are eliminated. This would take at least 12 years to bring the tax rate down to zero, but no new taxes have been added to fill the budget gap. It would create a special fund to use other revenue streams like lottery proceeds to fill any budget gaps and expedite the elimination process.

The Senate version of the bill would eliminate income tax in around four years, with income tax halving for most western Virgins starting next year. It creates a series of new taxes and increases ongoing taxes to cover the more than $ 1 billion hole in the budget.

“That means 36 million people will travel through West Virginia in one year,” said Senator Eric Tarr (R-Putnam), chairman of the Senate Finance Committee that wrote the bill. ‚ÄúThese people stop at our stores, they stop at our hotels, they stop at our gas stations, they stop at our leisure facilities. These out of state people come in and spend money on the things this exchanges. This relieves the burden on the person who works and lives in West Virginia because he or she bears almost half of the state budget. “

These increases are underscored by the increase in sales tax to one of the highest tax rates in the country from 6% currently to 8.5% next year. The VAT exemption also does not apply to downloaded digital products, promotional sales, lottery tickets, computer equipment and computing, and health club membership.

A new 3% tax will be levied on certain professional services including law, engineering, architecture and accounting. Hotel tax will now be charged with an additional 4.3% charge, and tax on cigarettes and other tobacco products will increase by $ 1 per pack.

Food tax on groceries would be reintroduced at a rate of 2.5%, while prepared foods and restaurants would be taxed at a sales tax rate of 8.5%. Soft drinks are taxed either with sales tax or with food tax, depending on the place of purchase.

If legalized at the federal level, recreational marijuana would be taxed. It would be regulated in the same way as tobacco and alcohol. Medical marijuana would be considered separate from recreational use for taxation purposes.

“You get something to eat and you pay 8.5 percent for it,” said Stephen Baldwin (D-Greenbrier), chairman of the Senate minority, after voting against the amendment at the committee meeting. “We’re trying to attract people who come and stay here, and I don’t see how these tax hikes do that.”

Senator Tarr said the abolition of income tax, which accounts for about 43% of the state budget, would be equivalent to about $ 1 billion. This tax hike would generate approximately $ 900 million in new revenue. The state budget is increasing by about $ 100 million annually, and leaders said tourism and projected population growth will help make up for the deficit.

Governor Jim Justice, who proposed the waiver of income tax during his speech on the state earlier this year, held virtual town halls to promote the initiative. Both the version of the House and Senate bill are very different from its original proposal.

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