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Senate Endorses Property Tax Cut; Justice Plan Stalls

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A proposed reduction of personal income taxes is stalled in the state Senate as that body opts to reduce personal property taxes.

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.

News Director, edouglas@wvpublic.org, 304-556-4946, @AppalachiaEric

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