W.Va. income tax bill passes House, moves onto Senate
CHARLESTON, W.Va. (WSAZ) - A bill that aims to reduce the state’s personal income tax rates passed the West Virginia House Monday morning.
“This is a new green deal for West Virginia. Not the one you’re thinking of, but a true green deal that puts money in your pockets,” said House Finance Chairman Eric Householder, R-Berkeley.
The bill passed by a 77-23 vote.
House Bill 3300 would cut the state’s income tax over time and uses revenue growth to offset the budget difference. It would reduce the tax gap by $150 million annually until they’re eliminated and adds no new funds to address the gap. It does create a special fund to use other income sources like lottery proceeds to fill any shortfalls.
The plan would not increase the sales tax or create any new taxes, as Gov. Jim Justice’s original plan would, but it is expected to take more than a decade to eliminate the income tax, according to the bill’s fiscal note.
Initially, the governor’s bill would cut most of West Virginian’s personal income tax by about 60% and make that money up with a 1.9% hike in the state’s sales tax on items such as alcohol, cigarettes and luxury items.
People living in West Virginia pay around $2.1 billion every year into the state income tax, helping to make up about 43% of the state’s budget -- a budget in 2020 that relied on relief from the federal government in coronavirus relief aid.
House Minority Leader Doug Skaff questioned if this was the right time to decide the income tax issue.
“I question the timing because of stimulus money, and that’s great. We can’t base it on tax collections from this year because they are skewed. We had artificial money coming in from our federal relief that we can’t rely on every year,” Skaff said. “Why do we have to do it today? On Day 48? Let’s kick this thing into summer. Let’s do it right and do it responsibly.”
The bill now moves onto the Senate.
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