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Property tax cut for business may be back, but in what form?

CHARLESTON, W.Va. — Gov. Jim Justice offered a “Just Cut Taxes and Win” initiative last year.

Not only did it not win, it didn’t make it out of legislative committee.

The proposal — which would have whittled away property taxes for manufacturers over a period of years — could be back this year in some form.

Legislative Republicans have endorsed rolling back property taxes for industry, which would require a state constitutional amendment.

But important details, like what would be covered, aren’t yet clear.

“What we’ve heard are a lot of different approaches — some dealing just with the inventory side of the tax, some dealing with machinery and equipment,” said Rebecca McPhail, president of the West Virginia Manufacturers Association.

McPhail on Friday wasn’t certain whether to expect the reintroduction of ‘Just Cut Taxes and Win’ — or something else.

The answer should become more clear this week as Justice makes his annual State of the State speech to encourage legislative priorities.

In addition to what was introduced last year, McPhail had also heard there’s a possibility of a phase-in to eliminate property taxes on inventory, machinery and equipment from a point forward.

“We’ll see,” she said. “We’re excited to think there may be a real look at that and the impacts that could have in such a positive way for the industry.”

Vernon Criss

The new vice chairman of the House Finance Committee, Vernon Criss, discussed the tax issue Friday during the annual Legislative Lookahead sponsored by the West Virginia Press Association.

Rather than focusing on relieving property tax on machinery, Criss described a desire to trim inventory tax in a way that would affect a broader swath of West Virginia businesses.

“What was talked about last year was strictly on manufacturing,” said Criss, R-Wood.

“One of the things we’ve talked about and I’ve advocated for is that we don’t do the machinery and inventory tax reduction — that we look at inventory tax for all businesses in the state.”

Criss characterized such an approach as affecting not only manufacturers, but also businesses like grocery stores.

“If we can eliminate the inventory tax across the board then mom and pop operations will generate savings to them to be able to employ more people or make other business decisions to help them stay here,” Criss said.

Ron Stollings

State Senator Ron Stollings, speaking at the same event, talked about the struggles of the southern West Virginia economy and its eroding tax base.

Stollings, D-Boone, said local governments and school boards would need assurances that if the inventory tax is taken away then some other way to fund local services would be available.

“The inventory tax, if it’s taken away without any type of replacement, will be even a further one-two punch to the area I represent,” Stollings said.

“That’s not something our counties could absorb.”

In recorded remarks, House Speaker Roger Hanshaw described working with school systems and counties as the tax is rolled back.

Hanshaw described the business and inventory tax as “among the most burdensome and job killing taxes in the country.”

Ted Boettner

Ted Boettner, director of the West Virginia Center on Budget and Policy, suggested a property tax cut focusing on manufacturers might not provide enough benefit to the state economy.

“This is industrial property. We’re talking about select property for manufacturing, coal and some natural gas,” Boettner said. “We’re talking about a very select group.”

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