The West Virginia Municipal League wrapped up its annual conference in Morgantown Friday with concerns about proposed tax changes coming from the state legislature.
Outgoing Municipal League President Chris Tatum is also the mayor of Barboursville, West Virginia. Tatum said while the proposed income tax cuts and much talked about property tax relief proposals loom large, it’s the Business and Occupation Taxes (B&O) cities collect that remain their revenue backbone.
“We have trash collection, recycling and the personnel that take care of those programs in addition to general street repair and maintenance. That’s what our B&O tax collection goes for,” Tatum said. “We have sister cities where that’s the only tax structure they have for revenue collection. And removing the B&O tax structure would be devastating to them.”
Tatum said the legislature continues to chip away at what businesses cities are allowed to tax, like the recent phase out of B&O taxes on new car purchases. The legislature passed that in 2022. He said those changes help focus concerns over the state’s home rule board tightening its requirements for municipalities to add local sales and use taxes on top of the state sales tax already in place.
West Virginia has 234 municipalities. Half, or 117, impose a business and occupation tax in some form.
State code says municipalities that impose a business and occupation tax must either repeal their B&O tax or receive permission from the Municipal Home Rule Board to impose a municipal sales and use tax at a rate not to exceed one percent.
Tatum said most West Virginia cities, towns and villages need both taxes to operate day to day and take care of aging infrastructure and broadband issues while doing their best to stay out of their residents pockets.
“Barboursville would have had to go back for rate increases and ask the Public Service Commission,” Tatum said “Although we had to ask for a small rate increase early on, we’re going to be able to stay out of the pockets of our residents far down the road by being able to become part of the whole duel tax program.”
Tatum said it’s vital that municipal leaders engage with state lawmakers as tax relief debate continues.
“Municipal government is the closest form of government to the people,” Tatum said. “That’s not to say that our legislators aren’t engaged with their constituents, but someone can pick up the phone and call me directly, someone can walk into city hall and talk to someone right now. We have the ability to fix problems right now. I think our ability to take those issues straight to our legislators as it relates to municipalities is important.”