Randy Yohe Published

House Will Study Tax Reform Plan Passed By Senate

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House of Delegates members said on Monday there is no rush in offering the people of West Virginia well deserved, and well thought out tax relief.

The Senate and Gov. Jim Justice now agree on the amended House Bill 2526, the estimated $750 million Senate plan that includes an initial personal income tax cut, a personal property tax credit for vehicles and a property tax break on equipment and inventory aimed at small businesses.

The 20.25 percent personal income tax cut – higher than the Senate’s initial proposal of 15 percent but lower than the House’s proposal of 30 percent – would be effective retroactively to January 1, 2023.

A provision to trigger future income tax reductions, similar to the one in the Senate’s original proposal, is included with changes. The new formula is based on a comparison of general revenue collections in a fiscal year minus severance tax collection as compared to the base year of 2019. 

Adjusted for inflation, if the general revenue collections minus the severance tax collections exceed the adjusted base year, a reduction would be triggered. 

The amendment also includes a refundable tax credit for personal property paid on automobiles and 100 percent refundable tax credit for disabled veterans against personal income taxes paid on homesteads, both remaining unchanged from the original Senate proposal. 

Small businesses with an appraised value of $1 million or less would be given a tax credit allowing a 50 percent refund against personal and corporate net income tax for personal property.

The removal of the so-called “marriage tax penalty” was not included as part of the compromise.

The bill was received by the house on Monday.

However, House Majority Whip and Finance Committee member Marty Gearheart, R-Mercer, said there needs to be a close examination of the Senate tax proposal before any final decisions are made.

“There have been a lot of negotiations and a lot of conversation, and a bill is coming to us. There is a lot of detail in that bill. And we want to be certain to go through it to make sure it is correct and something that we can work with,” Gearheart said. “The House members overall are interested in cutting taxes for West Virginians. This is a vessel to do that and we’re going to examine it closely to make sure it’s right and proper and deal with it at that point.”

Gearhart said there are no rubber stamps, by the House of Delegates or the Senate.