CHARLESTON, W.Va. — With 15 days in this legislative session, not only is significant tax reform still under consideration so is a potential amendment to the state Constitution dealing with real and personal property taxes.
The Senate’s Select Committee on Tax Reform is set to discuss the committee substitute for Senate Joint Resolution 8, also known as the Fair and Simple Tax Reform amendment, starting at 1 p.m. today.
The proposed amendment was introduced a week ago and is meant to repeal the personal property tax, limit the personal income tax, set new classes of real property taxes and provide block grants for local schools and governments.
It’s pretty sweeping, but Senator Robert Karnes, the chairman of the Select Committee on Tax Reform says there’s still plenty of time to consider it this session.
State leaders and economists have long lamented the relatively low real property taxes set in the state Constitution in the Great Depression.
Karnes wants to dive in and change that. He extols economic benefits of reducing the burden on businesses that are taxed on their equipment. But he says he recognizes how much local governments and school systems rely on property taxes for their revenue.
He said it is cast as a resolution to buy the measure just a little more time to get through the legislative session. The resolution is second-referenced to Senate Judiciary.
“The good thing about a resolution is that resolutions are not subject to crossover day so if it takes an extra day or so to move it out we can do that,” Karnes said earlier this week.
“It’s not subject to a veto and not subject to crossover day, so quite literally we could report this over to the House with two or three days left in the session and as long as they take it up there’s no reason they couldn’t vote.”
Karnes, R-Upshur, added, “By doing it this way we’re not in any way short on time.”
Early this week, Senate President Mitch Carmichael said earlier this week that he favors reforming the state’s approach to property taxes.
“One of the primary inhibitors to job growth in West Virginia is the personal property tax that we levy on both individuals – their cars, every piece of personal property they have – as well as business on business inventory and equipment,” Carmichael said.
“That has been identified as the primary job inhibitor. It is the number one job-killing tax.”
Carmichael added, “Likewise the burden that a citizen in West Virginia has just to pay for their boats and their four-wheelers and all the things they possess after having paid for the item by continuing to pay personal property tax on that. It is a wrong approach to taxation.”
Carmichael likewise said state leaders have already had enough time to contemplate these issues.
“This has been around this state for generations. We have enough time. We’ll put it before the voters. The decision here is whether or not we can craft a resolution to place before the voters of West Virginia on the ballot to approve an amendment to fix it, and I think we have plenty of time to do that.”
The Select Committee on Tax Reform earlier passed a bill that would establish a broad-based, 8-percent consumer sales tax on consumer purchases, including groceries and utilities. That bill would also change income taxes to a flat tax, eventually phasing out income taxes.
That bill has been passed on to the Senate Finance Committee, where a subcommittee started looking at it earlier this week.
Gov. Jim Justice on multiple occasions this week expressed skepticism over whether major tax reform is a good idea given West Virginia’s fragile financial condition and the amount of time remaining to consider the details.