Gov. Jim Justice’s latest proposal doesn’t exactly eliminate the personal property taxes that people pay annually on their vehicles. Instead, people would pay those taxes as usual and then receive a rebate or a credit toward their state income taxes.
“You would go online or fill out a paper form, attaching a receipt for your property taxes and submit it. And you will receive back, dollar-for-dollar, penny-for-penny a rebate for what you paid for your personal property taxes on your vehicle,” state Revenue Secretary Dave Hardy said today on MetroNews’ “Talkline.”
Justice introduced the proposal this week and called it the “Car and All Vehicle Tax and Elimination and Protection of Local Government Act.” The governor did not describe a timetable for the Legislature to consider such a policy, but his administration did distribute a draft bill.
The bill indicates that taxpayers would prepare and file an annual schedule of the amount of personal property taxes they’d paid on their vehicles along with the amount of income taxes they have paid to be submitted to the state Tax Commissioner.
Citizens who owe personal income taxes could then receive a credit based on what they have paid for personal property taxes. Credits also could be applied by businesses to corporate net income taxes.
There’s another important aspect: If people pay more on their personal property tax for vehicles than they owe in income taxes, they can claim the amount as a refundable tax credit.
“This is a refundable credit, which means even if you don’t owe income tax. Let’s say you’re a taxpayer that owes zero tax, you still get the credit,” Hardy said. “In other words, if you are a lower income bracket and you don’t show any taxable income, you still submit your receipt and you still get a dollar-for-dollar credit on your personal property tax.”
Why does @WVGovernor believe a rebate for personal property tax on vehicles is the right way to go? Governor Justice and Dave Hardy, WV State Tax and Revenue Secretary, provide analysis on this news with @HoppyKercheval. WATCH: https://t.co/yCFQ3nDJuy pic.twitter.com/WuwHhI5GqS
— MetroNews (@WVMetroNews) October 12, 2022
Hardy today said the system would need to be set up at first for refund checks. In years after that, there would be a decision about whether to issue refund checks or electronic transfers — or to proceed with tax credits.
“The first year, because we’ve already built the platform for our 2022 taxes, you’ll get a check back,” Hardy said. “Years going forward, we’ll have to decide whether you apply it as a credit for the tax owed or if you want to just get a check back. I suspect most people are going to want to get a check back.”
Justice didn’t specify when he would ask the Legislature to consider his proposal, but instead asked citizens to reach out to their elected representatives to support it.
Meanwhile, voters will have to make decisions by the Nov. 8 General Election about the Amendment 2 proposal that would give legislators the authority to exempt personal property taxes on vehicles and on what businesses pay for inventory, equipment and machinery.
Justice has been campaigning across the state against the amendment. He has characterized the amendment’s potential relief on vehicles as a sweetener that’s really meant to lead to the break for businesses.
The governor also has expressed strong concern over the financial support local governments derive from property taxes, saying all bets would be off with the amendment’s passage.
“I’ve found a way to take that off the table,” Justice said of the amendment.
So his proposed alternative would be the tax credit for what people will have paid on their vehicles.
“I’m all in to get rid of your car tax and I just had to figure a way to get that issue out of the way. It is bait. That’s all there is to it,” Justice said today on “Talkline.”
“Amendment Two is about changing the constitution of this state that’s been in place since 1932. It’s about taking local control away and giving control all to Charleston. It’s about running a risk that is big time.”
The West Virginia Chamber of Commerce distributed a statement today supporting Amendment Two and saying it’s the most direct path to eliminating personal property taxes on vehicles. That elimination would still require legislative approval, but leaders in the House and Senate have expressed support for doing so.
“Amendment 2 offers the Legislature the quickest and most efficient path to eliminate this burdensome tax and refund the counties directly,” said Steve Roberts, president of the Chamber.
“Passing Amendment 2 eliminates the need to collect the tax and provides an opportunity to reduce government bureaucracy.”