tax credit Story Archives - West Virginia Public Broadcasting

Mon Power Solar Projects Will Cost Electricity Users Less Than Planned

Due to tax credits in the federal Inflation Reduction Act, enacted by Congress a year ago, Mon Power said the surcharge will be 14 cents a month.

Mon Power customers will pay a lower surcharge for three solar projects.

Last year, the West Virginia Public Service Commission (PSC) gave Mon Power conditional approval to build the solar projects at a cost of $102 million.

Electricity users would pay a surcharge to cover that cost, coming out to 42 cents a month for the average residential customer.

Now, due to tax credits in the federal Inflation Reduction Act, enacted by Congress a year ago, Mon Power said the surcharge will be 14 cents a month, a third of what it was previously, starting on Jan. 1.

Mon Power projects the surcharge will go down even more to 11 cents a month in 2026.

Construction is already underway at the three sites, at Fort Martin, Rivesville and Marlowe.

The projects were also enabled by Senate Bill 583, which state lawmakers enacted in 2020.

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.

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.

Gaining New W.Va. Vehicle Property Tax Credit Calls For Correct Filing

The state advises that taxpayers pay the half year amount in 2023 to be eligible for the credit on the second half payment next year.

West Virginians are starting to receive their statements of personal property taxes due on vehicles, boats and RVs. But this year, the tax department says just pay the first half for now.

Beginning on January 1, 2024, taxpayers are eligible to claim a Motor Vehicle Property Tax Adjustment Credit. The first opportunity to claim this dollar-for-dollar credit will be on 2024 state income tax returns, filed in 2025, for all timely paid property taxes on vehicles during the 2024 calendar year.

The state advises that taxpayers pay the half year amount in 2023 to be eligible for the credit on the second half next year.

Timely in this case means by Oct. 1, 2023, for the first half payment, and April 1, 2024, for the second half payment. People who pay their taxes late won’t get the credit.

The recently passed legislation also includes a new homestead credit for disabled veterans that takes effect Jan. 1, 2024.

State tax officials suggest those qualifying disabled veterans should also wait to pay the second half of their real estate tax until 2024.

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

W.Va. Home Builders Desperate For BUILD WV Act Incentives

The BUILD WV Act was created in 2022 to grow communities across the state and attract new, workforce ready housing developments.

David Reitz is CEO of Marion County based Stella Construction. The veteran home builder has followed the state-incentive-laden BUILD WV Act.

Since it was passed into law last year. Reitz said he’s working to persuade Commerce Secretary James Bailey to create a BUILD WV certified district in his home county.

“We’re seeing a lot of growth from people that are working in Morgantown or working in Bridgeport, we’re kind of smack dab in the middle,” Reitz said. “There’s a convenience and a desperate need for middle income housing, here and everywhere.”

The BUILD WV Act was created in 2022 to grow communities across the state and attract new, workforce ready housing developments. BUILD WV offers up to three types of tax credits as incentives for housing developers, including a sales tax exemption for building materials, a 10-year property value adjustment refundable tax credit, and a potential municipal B&O exemption.

Secretary Bailey joined Gov. Jim Justice and others in Fayetteville Thursday to sign House Bill 3036 into law. The legislation increases the number of certified districts under the one-year-old BUILD WV Act and raises the limit on approved costs.

There was a limit of three undesignated certified districts within the act. The new legislation raises that limit without a number, including those who qualify under a set of economic development criteria within an annual $150 million overall threshold. The secretaries of Commerce, Tourism and Economic Development will make the district designations.

Bailey said the state has plenty of low income housing projects and there’s no limit to building expensive homes for those who can afford them. He said it’s the affordable, middle class homes that are in demand.

“There was not a program to help with affordable housing to meet workforce needs in many areas,” Bailey said. “This innovative idea from the governor really hit a sweet spot and the reception has been tremendous. We now have developers all across the state interested in it.”

Reitz said there are several constants for homebuilders across the state. He said land costs aren’t high, but excavation is costly, materials are very costly right now and it’s difficult for any developer to build that up at a lower price point, and just make the type of margin that you need to justify the effort. He said the tax credits this act makes available on building materials and property values could help turn a housing shortage into a boom.

“All those costs, municipal fees, B&O tax, all contribute to what the buyer is paying on the back end,” Reitz said. “Those costs just get passed on. The beauty of this bill is that it’s able to slate some of those expenses and make it more affordable and make it more appealing to do houses in that median price point.”

Reitz said as major corporations like Nucor and Berkshire Hathaway Energy build facilities that need hundreds of workers, housing challenges will increase – without some sort of change.

“It’s going to be a situation where, builders and developers are going to have to scramble to keep up because we just have such an older housing stock, at least up in our area,” he said.

Justice said the BUILD WV Act designates $150 million in certified district tax incentives for years to come, offering room for ultimate expansion.

“How in the world can we expect people to move here if we don’t have housing and affordable housing,” Justice said. “I mean, this isn’t rocket science. We’re going to expand this statewide.”

Gov. Justice Signs Tax Cut Bill

The signing of the bill comes just days after the House approved House Bill 2526, agreeing with the Senate’s proposals to reduce the personal income tax. HB 2526 represents a $754 million cut in taxes.

Gov. Jim Justice signed the much-debated tax cut bill with a group of lawmakers on stage at the Culture Center to celebrate the event with music and a balloon drop.

Justice said of the event’s jubilation, that the road to this tax cut has been rough, and today was a time to celebrate.

“God above gave us the ability to smile and laugh,” Justice said. “And with all of that, he knew this journey was gonna be tough, didn’t he? And he wants it to be that way. He wants to challenge us and we want it to be that way. But he gave us the ability to smile along the way.”

The signing into law comes just days after the House approved House Bill 2526, agreeing with the Senate’s proposals to reduce the personal income tax. HB 2526 represents a $754 million cut in taxes.

“It’s so much better in life and anything we do when we do it as a team,” Justice said. “When absolutely everybody wins, whether it be the House, the Senate, the governor’s office, all the great people in the state of West Virginia, when everybody’s on a team, and everybody wins. It’s a great, great, great day in the state.”

Personal income tax rates will be cut by 21.25 percent across all six tax brackets, retroactive to Jan. 1, 2023.

Additional personal income tax reductions will be limited to no more than 10 percent at any given time, but a formula will activate further tax cuts when the surplus allows.

Taxpayers will receive a 100 percent tax credit on their vehicles when they pay personal property taxes, and small businesses can claim a 50 percent refundable tax credit against personal income taxes or the taxes paid on machinery, equipment and inventory.

Disabled military service veterans will receive a refundable tax credit against their personal income taxes for real property taxes paid on their homes.

Senate President Craig Blair, R-Berkeley, said the proof of progress is in the evidence of economic growth in West Virginia.

“This is part of the process of what’s going on, it’s calculating the numbers, knowing what’s going on, that teamwork has been in place for over eight years,” Blair said. “And you can see it, you can see it on the jobs that are coming to the state of West Virginia, and as you grow your tax base, it actually makes it so that you have the resources to be able to give back and spread the wealth. And that is happening now in the state of West Virginia, it will only become exponential as we move forward.”

Opponents of the tax cut have voiced concerns about the state’s ability to keep up with infrastructure costs with such a high tax cut.

Blair called the tax cut momentous and mentioned that $760 million of the state’s reported $4.8 billion budget will return to the people of West Virginia.

“Four years of a flatline budget provided $588 million of the $760 million, that continued growth to be there, but we’re not counting severance taxes into the equation at all,” Blair said. “We’ll be able to do deferred maintenance, as we’ve got all that built in. That’s why we refused on the Senate side, to go to the 50 percent or 30, 40, 50, those numbers didn’t work and still maintain moving for the state forward, you got to be able to have money to be able to invest in yourselves.”

HB 2526 was signed into law Tuesday afternoon.