CHARLESTON, W.Va. — House of Delegates Finance Committee Chair Eric Nelson admitted his head was spinning Monday after hearing hours of information on previous tax reform studies in the Mountain State.
Nelson co-chairs the legislature’s new tax reform committee. Its all-day meeting Monday focused on separate tax reform studies that took place during both the Underwood and Manchin administrations.
Some of the discussion focused on residential property tax rates, which are below most other states.
“In the average state, 32 percent of the revenue is from property taxes, in West Virginia it’s only 20 percent and the biggest difference is residential,” state Deputy Revenue Secretary Mark Muchow told the committee.
Muchow added that residential property taxes nationwide average 20 percent, but in West Virginia it’s 5 percent.
Former Marshall University professor Cal Kent, who worked on the Underwood tax study, said that study recommended eliminating property taxes on inventories or to reduce or eliminate property taxes on machinery, equipment or fixtures.
“Because this is where we are out of line with other states,” Kent said. “But the biggest problem with doing that and this is what stopped the recommendation cold in its tracks—is that you’ve got to find a replacement source of revenue.”
The tax reform committee is expected to meet consistently in the months ahead.