Bill To Raise Taxes On Wind Turbines Advances In Senate

If Senate Bill 231 becomes law, wind turbines would be taxed as real property, not as personal property.

A Senate committee approved a potential tax increase on wind turbines Tuesday.

If Senate Bill 231 becomes law, wind turbines would be taxed as real property, not as personal property.

According to an attached fiscal note, that would increase revenue by $6.1 million annually, funds that would flow to schools, county commissions and the state’s general fund.

However, industry advocates say the move would make wind power less competitive in West Virginia and drive investment to other states.

Wind and solar are currently the cheapest forms of electricity. Supporters of the change say it helps fossil fuels compete with renewables.

The Senate Energy, Industry and Mining Committee approved SB 231 with little debate. The bill now goes to the Finance Committee.

Personal Property Tax Credit Clarified For Taxpayers

All motor vehicle property taxes due in 2024 but paid in 2023 may be claimed as a credit on a taxpayer’s 2024 income tax return. This issue first came up when the legislature proposed doing away with the personal property tax as a tax reduction measure, but county officials voiced concern about the loss of revenue.

After taxpayers and county sheriffs expressed confusion over the West Virginia Motor Vehicle Property Tax Adjustment Credit, the West Virginia Legislature passed a bill to straighten it out in the recent special session. 

Gov. Jim Justice signed the bill Wednesday. 

 “This is an example of good government,” Justice said. “We recognized a problem and fixed it as fast as we could. This bill brings clarity and relief to West Virginia taxpayers and allows everyone to pay their full vehicle property tax this year without being penalized. We should never punish someone for paying their taxes on time, and this bill ensures that we are treating all taxpayers fairly.”

Now all motor vehicle property taxes due in 2024 but paid in 2023 may be claimed as a credit on a taxpayer’s 2024 income tax return. This issue first came up when the legislature proposed doing away with the personal property tax as a tax reduction measure, but county officials voiced concern about the loss of revenue. This taxpayer credit won’t harm country governments and school boards. 

Taxpayers can pay the full ticket now or pay half in 2023 and half by April 1, 2024. Taxpayers who pay their personal property taxes on time will receive a rebate on their 2024 income tax return — even if the second half was paid in 2023. That is the return that taxpayers file in 2025. 

Everyone is eligible for this credit except for motor vehicle dealers. Leasing companies are eligible for the credit and are required to pass the savings on to the consumer.

Any taxpayers that do not owe West Virginia income taxes and are not required to file a state income tax return will be able to file a claim for rebate in early 2025 of their motor vehicle property taxes paid without having to file a full return. 

Continue to check tax.wv.gov for more information and form requirements as they become available.

County Commission Asks For Change To Tax Credit Law

A provision in House Bill 2526, the personal income tax reduction law passed earlier this year, allows taxpayers to receive a credit on their income taxes for paying their county level personal property taxes. But that is causing confusion for many. 

A provision in House Bill 2526, the personal income tax reduction law passed earlier this year, allows taxpayers to receive a credit on their income taxes for paying their county level personal property taxes. But that is causing confusion for many. 

Salango said he has been flooded with calls and emails from residents who already paid their full year’s property tax – which makes them ineligible for the dollar-for-dollar credit in 2024.

To take advantage of the personal property tax credit, the state tax department is advising that taxpayers only pay half of the amount owed this year by Oct. 1, then the other half in 2024 by April 1 to qualify for Motor Vehicle Property Tax Adjustment Credit. However, Kanawha County Commissioner Ben Salango said the West Virginia Legislature needs to make it simpler for taxpayers. 

“I think that if they will adjust for law to make sure that even people who pay early, for instance, if they pay in 2023, for personal property tax or automobile tax, in 2024, that they also get that rebate,” Salango said. “And so that’s one of the things we’ve asked the legislature.”

The Kanawha County Commission sent a letter on July 31 to leadership members of the state Senate and the House of Delegates asking for the legislature to make this change in a special session expected to happen next week. 

For links to tax forms and details on the net tax credits, click here.

Senate Endorses Property Tax Cut; Justice Plan Stalls

Gov. Jim Justice’s effort to reduce the personal income tax by 10 percent stalls in the state Senate.

Updated on Saturday, July 30 at 9 a.m.

Gov. Jim Justice issued the following statement late Friday night after the West Virginia Senate declined to take up his proposal to permanently reduce the personal income tax by 10 percent:

“I continue to believe with all in me that West Virginia can be like Florida, Texas, and Tennessee – with a booming economy and population, built on people moving into states with no personal income tax. We have the best people, best natural resources, four of the best seasons, and are located within a rock’s throw of two-thirds of our country’s population. Without a personal income tax, our potential is limitless.”

Gov. Jim Justice’s effort to reduce the personal income tax by 10 percent has stalled in the state Senate.

Thursday, the West Virginia House of Delegates passed House Bill 301, which would lower the personal income tax by an aggregate of 10 percent across all wage earners in the state.

Instead of taking up that bill, the state Senate passed a resolution that says lowering property taxes is a more effective way of helping the people of West Virginia than lowering income taxes.

In November, voters will have the opportunity to vote on giving the legislature the power to make changes to property taxes. It is called the Property Tax Modernization Amendment.

Part of the resolution reads:

“Ratification of the Property Tax Modernization Amendment would give the Legislature the authority to exempt certain classes of personal property from taxation. Specifically, passage of Amendment Two would allow for the elimination of personal property tax on the following six categories of personal property: machinery and equipment, furniture and fixtures, leasehold investments, computer equipment, inventory, and motor vehicles”

The resolution also suggests that if voters approve the property tax amendment to the state constitution,

“…the Senate also supports establishing an immediate process to refund to taxpayers the amount of personal property tax attributable to the taxpayer’s motor vehicle on their 2020 personal property tax ticket.” 

According to the resolution, the relief for businesses choosing to do business in West Virginia is estimated to be approximately $500 million if that happens. Justice said the effort to reduce the income tax in the state would have reduced revenue by $254 million. West Virginia closed the last fiscal year that ended on June 30 with a $1.3 billion revenue surplus.

Neither the House of Delegates nor Justice have responded to this change by the Senate.

Editor’s Note: This story was updated to reflect Gov. Jim Justice’s statement.

Legislative Priorities: Relaxed COVID Protocols, A Tax Repeal, Broadband Expansion And A Possible Raise For State Workers

West Virginia lawmakers are hoping for a more normal legislative session in 2022 with some relaxed COVID-19 protocols at the statehouse. There’s also renewed hope to reduce or eliminate the personal income tax.

State lawmakers from the Eastern Panhandle met for a Legislative Outlook event over Zoom on Friday. The Martinsburg-Berkeley County Chamber of Commerce hosts these events every year ahead of the state legislative session, which begins in mid-January.

The Eastern Panhandle is home to several of the legislature’s key leadership members, such as Senate Judiciary Chair Charles Trump, R-Morgan. Trump said visitors to the capitol this year will likely get to roam the marble halls as they have in years prior to the pandemic.

“I do not think we’re gonna see restrictions on the number of people in the building. There may be, room by room, some limitations on how many people can be jammed into a particular room,” Trump said. “But I’m hoping that we’re going to see some relaxation from what we had early this year.”

It’s not yet clear if masks will be required of visitors.

For Trump, his biggest priority this year will be to follow-up on a resolution passed last session that will allow West Virginia voters to decide in the November general election if the legislature can amend the state’s constitution to reduce the personal property tax on machinery, equipment, inventory and vehicles.

Trump said it will be prudent for lawmakers to be transparent with voters about what the change to the tax could mean.

“I know there is some nervousness among school boards, county commissions and municipalities who are the recipients of those levy monies,” Trump said. “And it’s incumbent upon us to lay out in a statute this year, the specific plans – how those taxes would be reduced [and] how the legislature will replace the funding.”

On the flip side of the discussion over personal property tax, something that did not make it out of the legislature last year was a repeal to the state’s personal income tax. In a surprising turn of events, the bill to repeal the income tax was dramatically shot down in the House of Delegates on the final night of the 2021 session.

House Majority Whip Paul Espinosa, R-Jefferson, said he thinks this issue will be revisited this year.

“Talking with our colleagues in the Senate, talking with the governor’s office [about the] personal income tax, I think there’s still a strong appetite in both chambers,” Espinosa said of a potential repeal.

Education will also likely be top of mind for lawmakers this session.

Senate Education Chair Patricia Rucker, R-Jefferson, said her goals will be to tweak and strengthen past legislation. She said she hopes to perfect a bill that requires cameras in special education classrooms, and she also wants to introduce legislation that she says would “tighten” physical education requirements in schools.

Additionally, Rucker said a big priority will be to reform the higher education funding model.

“I’m really hopeful we’re going to find a funding model that is going to fund higher education in a fair way, that is going to take partisan politics [and] take political influence out of the equation,” Rucker said. “It’s going to be based on whether the institutions are fulfilling their missions [and] doing what they set out to do and helping students graduate.”

Charter school expansion in West Virginia, which was one of the bigger topics in education last session, will not likely be a topic this year, according to Rucker.

Lawmakers also mentioned their hopes to tackle other issues such as more broadband expansion, with the goal of getting high speed internet in every West Virginia home.

Rucker said there are also discussions happening about salary increases for public employees, including teachers.

The 2022 West Virginia Legislative session will begin on Jan. 12.

During The 2021 Session, West Virginia Lawmakers Teed Up Three Proposed Constitutional Amendments. Here’s What They’d Do

While any 60-day legislative session focuses on the hundreds of bills introduced and considered, Republican supermajorities this year helped push three proposed constitutional amendments to the ballot for voters to ponder.

Come November 2022, West Virginians will have the opportunity to decide whether to amend the state constitution on three different issues — preventing the state Supreme Court from intervening in impeachment proceedings, giving the Legislature the ability to exempt more types of property taxes and allowing religious denominations to incorporate.

House Judiciary Chair Moore Capito, R- Kanawha, said lawmakers in the Republican supermajority tried to be thoughtful in offering changes to the foundation of state law.

“I personally think that we have to always proceed with caution when we’re talking about modifying something that is as large and as important as our Constitution,” Capito said.

These proposals — considered by the Legislature as joint resolutions — require a two-thirds majority of both the House and Senate before heading to the voting public for ratification.

Late into the session, lawmakers had considered putting them on the ballot in a special election as soon as July but ultimately backed off from that date.

House Judiciary Minority Chair Chad Lovejoy, D-Cabell, said he’s glad they gave voters more time to study the issues at hand. He also said costs of a special election would have been in the millions.

“That’s a pretty monumental undertaking to statewide elections in a matter of weeks, coming off of the 2020 election — which was unusual, to say the least, in terms of COVID and the different things,” Lovejoy said. “So, I don’t think it was prudent from a cost perspective and a functional perspective to try to do it.”

Voters will now wait until Nov. 2022 to decide these three issues.

2018 Supreme Court Impeachments Inspire Proposed Constitutional Amendment

Like all pieces of legislation, each of these proposed changes to West Virginia’s foundational law come with context — and arguments both in support and in opposition. That’s especially true for House Joint Resolution 2.

In 2018, as impeachment trials were underway for justices of the West Virginia Supreme Court of Appeals, then-Chief Justice Margaret Workman filed a lawsuit challenging her own impeachment.

“This lawsuit was started and no one thought that stood a chance — because it was just counter to everything that people knew to be true in the Constitution,” said former Senate President Mitch Carmichael, who was named as a defendant in the suit.

In offering a ruling on Workman v. Carmichael, an an-hoc bench of the state Supreme Court ruled that the House failed to follow its own rules in the impeachment process and had overstepped its authority in adopting some of the articles of impeachment.

“So we were shut down, we adhered and abided by the judicial rule — even though we thought it was wrong,” Carmichael said.

State lawmakers appealed to the U.S. Supreme Court, which ultimately decided not to hear the case. Since then, legislators have tried to find a way to keep courts from intervening in future impeachments and further clarify the separation of powers.

Carmichael said, while he never thought he’d be part of something that inspired a potential constitutional amendment, it’s simply necessary in his mind.

“It’s the appropriate right thing to do,” he said. “Whether it’s my name or someone else’s name — that ruling just went counter to everything all of us believed to be the right thing to do.”

But it’s probably no surprise — given the fact that there was a lawsuit involved — that not everyone agrees. Huntington-based attorney Marc Williams represented Justice Workman in the case.

While Williams acknowledges that impeachment is inherently political, he argues the proceedings in 2018 proved the courts need to have the opportunity to play a role when things go awry.

“It shouldn’t come as any surprise that there would be a review of the impeachment proceedings that was so flawed, that would ultimately find that it was done [improperly],” Williams said. “But ultimately, I think it’s an extraordinarily rare set of circumstances where a court would get involved and only when really blatant mistakes are made.”

Williams argues that adding this change to the West Virginia Constitution could have disastrous effects if another impeachment took place but was not properly handled by the Legislature.

“If I had all the money in the world, and could actually go out and try to educate the voters on this, I would point out that this is an extraordinarily dangerous initiative,” he said. “Because, essentially, what you’re doing is you’re giving the Legislature the ability to impeach almost for any purpose with no appellate review — with no opportunity for anybody to review it.”

Potential Job Growth Vs. Funding For Counties: Legislature Could Exempt Property Taxes If Amendment Is Ratified

Another proposed constitutional amendment also has recent history behind it.

Since taking control of the Legislature following the 2014 election, Republicans have rallied behind exempting manufacturing equipment and inventory taxes — but had failed to attain a two-thirds majority from both chambers to send the issue to voters.

But, during the 2021 legislative session, lawmakers in both the House and Senate adopted House Joint Resolution 3, which reads differently than past proposals. If ratified, the Legislature would be able to exempt virtually all types of personal property — from manufacturing equipment and inventory to personal vehicles.

West Virginia Manufacturer’s Association President Rebecca McPhail said the goal of exempting taxes related to her sector is job growth.

“The challenge that we have right now, because of the way these taxes are applied to our industry, specifically places us in the top 10 worst states for taxation on manufacturing,” McPhail said. “And that’s very challenging. That’s challenging from an economic development perspective — just just to get a first look.”

McPhail said the amendment would untie the hands of lawmakers to exempt taxes as they see fit.

“This is not just limited to manufacturing,” McPhail said. “This is a broader constitutional amendment that would allow the Legislature at some future date to address a number of types of personal property tax, including the taxation that affects our members — but also small business inventory as well as personal vehicles.”

In total, the Legislature would have the ability to exempt part or all of roughly $300 million in tax revenue, according to the West Virginia Center on Budget and Policy.

But Jonathan Adler of the West Virginia Association of Counties said there’s currently no way to recoup revenue that funds county and municipal governments and, most notably, school systems.

“I think counties do certainly support jobs [and] job creation,” Adler said. “But if there’s no mechanism to replace the lost revenues for counties, then we’re kind of scratching our heads wondering exactly what that revenue replacement is going to be.”

While Adler said county and local governments are open to the idea of exempting various types of personal property taxes, he said there are a lot of unknowns — especially given the way the state funds local governments and schools.

“We’ve always said, there’s not a plan yet,” Adler said. “We need a plan to try and support something like this. We need to see what your plan is when you get the authority.”

Incorporation Of Churches Will Also Be On The November 2022 Ballot

While the other two proposed amendments saw at least some opposition, Senate Joint Resolution 4 made its way through the statehouse with overwhelming backing.

The proposal would allow churches to incorporate — offering them the ability to manage assets more like other businesses and nonprofits. Capito said it was about modernizing West Virginia law to match most of the rest of the country.

“What we have now is the opportunity for churches and houses of worship to incorporate, which is pretty standard procedure across the country, quite frankly,” Capito said. “So I think we’re just synching up there.”

While constitutional amendments are oftentimes divisive, Lovejoy said the proposal to allow churches to incorporate is rather innocuous.

“It, frankly, is a little easier to operate under a traditional corporate sense than it is under this kind of antiquated Board of Trustees management,” Lovejoy said. “So I don’t think it has anything to do with taxes. It has nothing to do with politics, frankly. I think that it does make things a little easier to manage religious institutions.”

Votes for ratification may be a long way away, but the issues are bound to stir public discussion and influence from special interest groups. No doubt, there will be mailers, advertisements and campaigns in support and against some of the more controversial proposals.

And with another legislative session slated ahead November 2022 — and with supermajorities intact in the meantime — it’s possible even more proposed amendments will wind up on the ballot.

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