MARTINSBURG, W.Va. — Gov. Jim Justice said the time is now to attract new people to West Virginia. He promoted his plan for phasing out the state’s income tax during two town halls Thursday in the Eastern Panhandle.
Justice is supporting a proposal to cut the personal income tax in three years with increases in consumer taxes and a tiered severance tax plan impacting coal and natural gas.
Justice spoke before an audience of around three dozen people in Martinsburg. He said his plan would result in residents keeping an average of $1,483 each year.
“When you put that kind of money right here in our back door in everybody’s hand, they’re going to spend it in our businesses. Our businesses are going to boom,” he said.
Justice also defended his plan’s provision enforcing an increase in the state’s sale tax.
“Every one of those houses has an extra $1,483,” he said regarding business owners. “Sure, it’s going to cost them $25 or $26 of that $1,483, but do you really think that those people in masses are going to drive across state lines to do their shopping? There’s no way.”
K.C. Adams operates a CJ Vapors location in Inwood as well as two other shops in Virginia. He said if Justice’s tax plan goes through, it could force businesses to increase prices and encourage customers to travel across the West Virginia-Virginia border.
“I know from historical data when they added the tax four years ago, that we’ll lose so much business that we won’t be able to compete, and I will focus my resources on Virginia where I can actually make a profit and earn a living,” he said. “Along with that, I would end up laying off four employees.”
Adams spoke to Justice during the meeting as well as state Revenue Secretary Dave Hardy and Deputy Revenue Secretary Mark Muchow following the town hall.
Jason Murphy, who runs a beekeeping supply business in Shepherdstown, told Justice both business owners and employees are focused on saving money as the pandemic continues to have a financial impact on people.
“People will drive across the state line to save three cents on gas,” he said. “If someone could save $25 because their tax is cheaper to go to Maryland, ten miles in the other direction, they’re going to do it. And then they’re going to buy their groceries there, too.”
Murphy added increasing the sales tax could be the final blow to some small businesses.
“I’ve watched seven or eight of my friends lose their businesses in the last year. You can’t go and find a job in the middle of a pandemic,” he said. “There are food banks and stuff, but we’re seeing people who have never needed assistance looking for it. Businesses depend on feet in the door. For a year now, we haven’t had feet in the door.”
Justice held a similar town hall in Berkeley Springs. The events took place as the House of Delegates moves forward with its tax proposal which includes a more gradual elimination of personal income tax.