West Virginia tax reform ideas face federal trouble

West Virginia

CHARLESTON, WV (WOWK) — West Virginia’s legislative session begins next week, but people looking for tax relief may have to wait because of new restrictions from Congress.

Last year, Gov. Jim Justice and the West Virginia State Senate voted to start phasing out the state’s personal income tax, as a way to draw in new residents, but the proposal was rejected by the House of Delegates. This year, it was widely expected that personal income tax reduction would again be on the agenda, but Congress apparently put a halt to that with COVID-19 relief dollars.

“There was an insertion of language that basically said, you cannot lower the tax and receive the dollars from the American Rescue Plan or the Cares plan or whatever it might be and so that’s a real issue,” said Gov. Jim Justice (R-WV).

“The money that came down from federal was to help us. That was to get people back on their feet and that’s what we should do with it. We shouldn’t go out here and cut things just because we want to cut things. You got to use that money for what it was intended. Help small businesses, help people survive,” said Del. Doug Skaff, (D-Kanawha, Minority Leader).

Other Republican leaders want to reduce taxes on companies, by repealing the controversial business inventory tax, but again they would have to find other money to offset the revenue loss, or federal aid might have to be returned to Washington. West Virginia is among several states suing to overturn the federal rules.

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