CHARLESTON, WV (WOWK) — The West Virginia legislature is now going to consider a bill from Governor Jim Justice that will eventually do away with the state’s personal income tax. If approved, the bill would cut the state’s income tax by 60% next year and then completely phase out the tax over the next three years.
The consumer sales tax would rise from the current 6% to 7.9%. Republicans believe it will attract new people and businesses to the Mountain State.
“Well you know when a business comes and they bring a lot of workers. And those workers bring their families. And then they buy houses and they buy cars. And they buy in our communities,” said Delegate John Mandt, (R) Cabell.
“It’s one of those things we can do to reverse that population decline that is happening. We see many people in our state that is leaving West Virginia in search of prosperity,” said Finance Chairman Delegate Eric Householder, (R) Berkeley.
The bill would increase the tax on a pack of cigarettes to $2.25. Taxes on sugary drinks would rise by an unspecified amount. There would also be taxes on services such as attorneys, and advertising. Democrats especially don’t like the sales tax hike.
“He’s proposing a 7-point-9 percent consumer sales tax which on the border counties is going to be really difficult. And in the cities where you add a percent, that’s almost 9 percent on sales tax,” said Del. Larry Rowe, (D) Kanawha.
“I’m afraid it will disproportionately hit the lower end earners, more than it affects the high-end earners,” said Del. Brent Boggs, (D) Braxton – Minority Finance Chair.
Severance taxes on coal and natural gas will be tiered on a sliding scale. Taxes will be low if production is low, but the tax rate goes up if sales boom.
Even though the Republicans have super-majorities in both the House and the Senate, the Governor’s tax bill is not a done deal. The next stops for the bill are the finance committees of the House and Senate.