After weeks of discussion and several statewide town halls, West Virginia Governor Jim Justice announced on Thursday, March 4, that he has submitted his official proposal recommending the repeal of the personal income tax to the state’s legislature.
A statement released by the governor’s office says, “(Justice) has submitted to the legislature a bill that will seize a once in a lifetime opportunity to transform West Virginia’s tax structure; raising wages, raising home values, bringing in more businesses, more people and making life better for all West Virginians.”
“We may never have an opportunity like this ever again,” Justice said. “Because of how we’ve handled the COVID-19 pandemic — how we’ve saved lives, had the best vaccine program in the nation, and kept our economy on the move — the spotlight of the world is on West Virginia right now. This is the time to seize our opportunity.”
If the governor’s proposal is enacted, West Virginia would become the first state in the Northeast or Mid-Atlantic regions of the United States to cease the collection of state income taxes.
Justice believes that repealing the state’s income tax will also “encourage job growth in West Virginia because people and businesses want to locate in low-tax states”.
Justice further promises that “All lower income brackets less than $35,000 a year will receive a tax rebate check under the plan. Low income and high-income taxpayers will all see a net-positive benefit if this plan is enacted.”
Under the governor’s proposal, the consumer sales tax would increase from the current rate of 6.0% to 7.9%. In addition, a single-item “luxury tax” would be imposed on purchases in excess of $5,000. Examples of such items may include a single piece of jewelry or a highly-valuable piece of artwork.
Also under the governor’s plan, “The consumer sales tax base will be expanded to include computer hardware/software, legal services, accounting services, other professional services, selected advertising, electronic data processing and health and fitness memberships.”
A “tier” system would be implemented to regulate oil, natural gas and coal severance taxes, and taxes on soft drinks and tobacco products would also be increased. Rebates would range from $350 to $50 and would be capped at a family of three with a household income of $35,000 per year.
“To truly make this work, we all need to pull the rope together as West Virginians,” Justice said.
Justice’s plan would begin with a 60% reduction of the state income tax for its first year.
The West Virginia Daily News will provide updates regarding the governor’s proposal to repeal the state income tax, including political reaction, as additional details are made available.
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