CHARLESTON, W.Va. — The Senate Finance Committee passed a tax overhaul package. The proposal now goes to the full Senate.
Senators on the Finance Committee got their first look at two pieces of legislation Monday afternoon. One would allow the constitutional flexibility to cut the property taxes, and the other would partially make up for that by increasing sales taxes by a half-penny and boosting taxes on tobacco products.
Supporters are aiming to boost manufacturing investment in West Virginia by cutting inventory and machinery taxes for companies. Inventory taxes on retailers would also be cut under the proposal.
And, perhaps as a sweetener for average citizens, the proposal would cut personal property taxes on vehicles.
Cutting those taxes would require a constitutional amendment. Then the plan calls for a six-year phase-out.
The tax cut proposal has been under discussion for months, with others asking how the money would be made up to county governments and school systems that depend on property taxes.
So the other piece of legislation would raise sales taxes from 6 percent to 6.5 percent. And it would mean big bumps on cigarettes, other tobacco products and vaping products.
Senators on the Finance Committee spent a couple of hours going over the implications of the tax shift.
State Commerce Secretary Ed Gaunch testified that he is in favor of cutting the taxes on manufacturers. He agrees that would boost growth.
Gaunch described a recent conversation with a company that wanted to know West Virginia’s plans on these taxes.
“I’m 100 percent in favor of getting rid of the inventory and personal property tax,” Gaunch said. “If we can get rid of that and make the local governments whole then I’m in favor of that.”
Jonathan Adler, executive director of the West Virginia Association of Counties, said he appreciates the effort to ensure level funding to county governments and school systems.
But he still has questions about the proposal.
“We all do want jobs and we want growth,” he said. “Our biggest fear is it’s taking taxing authority away from the counties. That certainly has us wondering quite a bit.”
Senate Finance Chairman Craig Blair, R-Berkeley, has spoken enthusiastically about the tax proposal. He said he’s been trying to communicate openly about its ins and outs.
But some of that effort, he said, was complicated by a vehicle accident that injured Blair right before the session began.
Nevertheless, he said, “It’s commitment to the future of West Virginia.”
Senator Ron Stollings, D-Boone, said the tax shift requires a lot of assumptions.
“I just don’t think it adds up mathematically. That’s another big concern,” Stollings said on MetroNews’ “Talkline.”
Among his other worries are projections of downward state revenue trends in upcoming years.
“At this point, I don’t think we have a caucus position on it,” Stollings said, “but there is enough heartburn and concern that this is something we have to take a look at.”
Ron Stollings, West Virginia State Senator (D-Boone), talks with @HoppyKercheval about the Republican tax plan, and if it’s a good or bad idea. WATCH: https://t.co/wkudfIRZCB pic.twitter.com/8fAmQyIqt4
— MetroNews (@WVMetroNews) February 17, 2020