CHARLESTON, W.Va. — A fiscal note from the state Department of Revenue for a tax reform package in the House of Delegates says it will result in a revenue gain of $172 million for the coming fiscal year, $29 million in 2019 and $11 million by 2020.
The amount goes down because the bill being considered in the House would bring down the statewide sales tax from 6 percent to 5 on July 1, 2018.
Backers of the bill are touting the extra revenue as a tool for balancing the state budget for the coming fiscal year. The bill is up for second reading, amendment stage, today in the House. It was challenged on first reading Saturday by the Liberty Caucus and by Democrats.
The bill being considered in the House would tax food for home consumption at a 3 percent rate.
The bill also would broaden the state sales tax, eliminating current exemptions this Oct. 1 for items such as mobile homes (now subject to the full tax), telecommunications services, personal services like hair and nails, professional services like legal, accounting or engineering, contractors, and travel agency commissions.
Then, starting on Jan.1, 2018, the bill would start to tax electronic data processing; health and fitness organization memberships; primary opinion research services; music instruction services; artistic performances; and technical evaluations.
As it’s currently structured, the bill also establishes a flat, 5.1 percent income tax starting Jan. 1, 2018. It removes personal exemptions and creates a standard deduction.
“We note that the proposed Personal Income Tax changes reduce the burden of liability on some but not all individuals with taxable incomes below $25,000 and above $100,000. Those with taxable incomes between these levels will largely experience increased liabilities relative to the current structure.”
A tax reform bill is also moving through the Senate and is up for consideration today in Senate Finance. No fiscal note for that bill, SB 409, appears to be available yet.