CHARLESTON, W.Va. — The Justice administration announced that the state Chamber of Commerce supports its .045 percent Commercial Activities Tax on businesses. The administration says that would amount to $45 million toward the coming year’s state budget.
A release put out by the Justice administration included a statement from Steve Roberts, director of the state Chamber of Commerce.
“It’s time to solve this budget crisis and give West Virginia businesses stability and predictability,” Roberts stated. “We’ve heard loud and clear from West Virginia employers that they are willing to participate in helping stabilize the state’s finances.”
By Saturday, there will be 7 days left in the regular legislative session. Gov. Jim Justice and legislators have been working to resolve how to reconcile an estimated half-billion-dollar budget gap for the coming fiscal year.
Justice has been advocating for regular people, the wealthy, business and the government to work together to solve the budget problem.
“I’ve said all along that the budget must have everyone pulling the rope together, and my deal does that,” Justice stated in the news release from his office.
When Justice first announced the tax during his State of the State address, Roberts expressed skepticism. At the time, the tax was proposed to be .2 percent, raising an estimated $214 million. Justice has since scaled back the proposal.
Initially, Roberts said, “These are not taxes that encourage growth. It simply says, ‘What are your receipts? Well, here’s your tax rate.’ That is a very difficult tax for businesses to swallow. Particularly businesses that are struggling to keep people employed, struggling to continue making investment in West Virginia.”
In recent days, Republicans in the House of Delegates have been talking with the Justice administration about an end-use tax that would, effectively, be a sales tax on business. The Republicans have said that would be within their philosophy of broadening the base of what is taxed in West Virginia.
Justice administration Chief of Staff Nick Casey credited the Republicans with pushing the idea forward as a component of how business might contribute to the state’s budget picture.
“I applaud the Republican leadership,” Casey said Thursday. “The governor had come up with what he called the CAT tax, and in lieu of that the recommendation that came out of the leadership of the House was eliminate that but instead take away some of the exemptions on business to business transactions.”
Casey continued Thursday, “We applaud the Republican leadership. They thought it was appropriate. The cuts come from government, the people would come up with the additional quarter in sales tax, and business gets a real opportunity to participate by having some of their transactions that were formerly exempt be subject to sales tax.”
Justice followed up by saying, “I think our businesses need to participate. We can’t lay all this in the laps of the people.”
In the statement by Roberts released today, the Chamber of Commerce director seemed to make reference to the alternatives of the commercial activities tax versus the direct use tax.
He made reference to a Justice promise that the commercial activities tax is meant to be temporary, until the state gets its economic footing once again.
“The least painful thing we can do is a temporary commercial activities tax that will sunset,” Roberts said. “We believe businesses realize it’s a significant contribution and appropriate one.”
Roberts’ comments also appeared to make reference to the possibility of $150 million in cuts that Republican legislative leadership left undefined at a group announcement laying out a budget pathway.
Those cuts were likely to come from education, healthcare and higher education, GOP legislative leaders said at the time.
“The business community recognizes that education and good health are essential to the future success of our state. Vital health and education programs are on the line, and if participation from business can save those programs our members want to be part of the solution,” Roberts stated in the release put out by the Justice administration.