CHARLESTON, W.Va. — The state House of Delegates approved its bill on Friday to exempt Social Security retirement benefits from state income tax and sent it to the Senate.
HB 2001 gives retirees age 65 and up, or taxpayers of any age permanently and totally disabled two options: exclude Social Security benefits from taxation or exclude $8,000 of income from taxation – whichever produces the greatest savings.
The vote was 96-1. Delegate John Doyle, D-Jefferson, was the sole holdout. He said he’s 76. “I’d love to have the money but I don’t think the state can do without it.”
The governor’s budget shows the impact on state revenue will be about $50 million.
“It’s not only about $50 million in tax relief but it’s also about fairness,” House Finance Committee Chairman Eric Householder, R-Berkeley, told MetroNews after the vote.
Householder said the House perfected the governor’s original plan for the tax elimination.
“It gave tax relief more so to the middle income and that’s what we were striving for, what we were trying to accomplish,” he said. “Anytime we talk about tax relief or tax reform, when our citizens benefit from it–it’s a win for all us.”
Delegate Larry Rowe, D-Kanawha, supported the bill but noted that the tax cut won’t much help lower income retirees.
That information comes from a couple of sources. The Department of Revenue told legislators earlier this year that only 22 percent of Social Security benefits in the state are taxed.
And the West Virginia Center for Budget & Policy released a chart early in the session, using figures from the Institute on Taxation and Economic Policy, that shows retirees in the $21,000 to $36,000 income range will see a $35 tax cut; $36,000 to $56,000, a $161 cut, and $56,000 to $91,000, a $623 cut.
Incomes below $21,000 already pay no tax on benefits.
Rowe said that along with passing the bill, the state needs to so things to help the poorer retirees make ends meet so they won’t be left behind.
Other supporters of both parties praised the bill without conditions. Delegate Evan Hansen, D-Monongalia, said, “When we pass this bill, we’ll finally be doing right for our seniors.”
Mon County Democrat colleague Rodney Pyles said his first bill back in 2017 was to exempt Social Security from Taxation. And Mon Democrat John Williams said, “it’s high time we stop balancing our budget on the backs of our senior citizens.”
Zack Maynard, R-Lincoln, said more and more grandparents in his county are raising their grandkids and this tax cut will help them support the kids.
This bill will apply to this tax year, 2019. It is largely the same as the governor’s bill, SB 342, that is sitting in Senate Finance.
Householder said he’s confident the Senate will accept the House’s version.
“I think it’s agreeable. I don’t think you’ll see many problems out of it. I think you’ll see bipartisan support from our colleagues in the Senate as well,” he said.
Other bills
The House passed SB 27 86-11. It removes the current law restricting Keno lottery games to bars and clubs, opening it up to be offered by any licensed lottery retailer. A 2017 Lottery Commission fiscal note for a previous version of this bill estimated $3 million in new Keno sales, with a net of $592,300 after deducting winnings, retailer commissions and fees. All 11 votes against were Republican. All local delegates voted for it.
HB 2524 passed 97-0. It allows a pharmacist to convert a 30-day prescription to a 60- or 90-day prescription if the prescription permits refills and meets other conditions. It goes to the Senate.
So does HB 2679, which allows the state to issue an ID card without a photo to a person whose religious tenets or beliefs forbid photos. It also passed 97-0.