CHARLESTON, WV (LOOTPRESS) – The West Virginia House of Delegates assembled Wednesday as part of the ongoing Legislative sessions to discuss several a number of bills not the least significant of which was House Bill 2526 pertaining to reduction of the personal income tax.
HB 2526, introduced by Speaker Hanshaw (R-Clay, 062) and Delegate Skaff (D-Kanawha, 057) entails the addition of three new sections to WV Code (§11-21-4g, §11-21-4h, and §11-21-4i) and the amendment of §11-21-93 (relating to the personal income tax and reserve fund.)
The bill provides for reduced graduated income tax rates, reduce the rate of withholding tax on nonresident income, reduce the rate of withholding tax on the nonresident sale of real estate, reduce the rate of tax on composite returns, and reduce the rate of withholding on gambling winnings, among other changes.
But perhaps most notably, the legislation entails a 50% cut on the state income tax over an extended span.
These changes are to apply retroactively to the start of the year – January 1, 2023, with additional rates to be applied at the beginning of 2024 and 2025. Upon passage by substitute through the House Finance Committee on Friday, HB 2526 made its way to the House Floor for a full vote on Wednesday, which saw a decisive 94-2 split aye to nay.
Despite what appears to be a one-sided result, a fair amount of discussion was had during Wednesday’s session prior to the casting of a final vote. Delegate Rohrbach (R-Cabell, 026) encouraged delegates to adopt a logistical approach to analysis of the proposed bill as it pertains with West Virginia’s place in the national arena, stating,
“Those of you that have served with me know that I tend to look at the numbers. As we consider this bill, I think we have to consider where we’re at in West Virginia. There are only 15 states that have a higher tax bracket than we do: California, Connecticut, Minnesota, New Jersey, Iowa, Hawaii, Vermont, New York, Idaho, Oregon, Maine, Nebraska, Arkansas, Wisconsin, and South Carolina. Obviously, we’re trying to compete against our surrounding states. There are eight states that have no income tax: Alaska, Nevada, Florida, Wyoming, South Dakota, Tennessee, Texas and Washington state. Again, those seem to be pretty fast-growing states.”
The minimal opposition to the bill saw representation by Delegate Williams (D-Monongalia, 080,) one of only two “nay” votes on HB 2526 Tuesday.
“I rise today in opposition of this bill because I’m against tax increases on middle class, working class, and upper-class folks. It’s my fear that if we do this today, we are guaranteeing that that’s something that’s going to happen in the future,” Williams said, going on to refer both President George H.W. Bush, calling the bill “voodoo economics,” which refers to policies considered unrealistic or ill-advised.
“If we eliminate the income tax, we’re going to raise the sales tax, the excise tax. How business friendly is that? We’re going to tax you more at the point of sale in which commerce is conducted,” he continued. “I can’t stand for that.”
Countering this point was Delegate Ridenhour (R-Jefferson, 100) who took particular exception to the reference of “voodoo economics.”
“If people remember when our great President Ronald Reagan instituted the tax cuts that he did, we began the greatest economic surge in our country’s history,” declared Ridenhour. “I’d like folks to keep that in mind as they’re looking at this bill and the potential for that economic rise within the State of West Virginia.”
Delegate Barnhart (R-Pleasants, 009) was also one of many delegates to voice “strong support” for the bill on Tuesday, proclaiming of the personal income tax:Â “It punishes success. It punishes the working people of this state who are just trying to get up and earn an honest living every single day. It’s long past time for reform on this method of taxation.”
Barnhart went on to draw parallels between the lawmakers and residents of the state to that of a family unit.
“I’ve always viewed the state budget like a family budget,” he said. “When times are tough, we have to make sacrifices – we all know that. But when times are good, we need to give back. The proposal before you today represents an investment, a historic investment in our most important resource, the people of West Virginia.”
Delegate Pritt (R-Kanawha, 053) voiced his belief that the proposed bill would serve to support small businesses operating in the state.
“One of the reasons I came here was to help small businesses, and one of the key things that we can do to help small businesses is to ensure that we have a tax rate that is fair and reasonable to small businesses,” he said.
“That’s what I came here to do, I came here to help small businesses, to help individuals, and to lower taxes,” Pritt continued. “With the passage of this legislation, that’s what’s going to happen. We’re going to have a more prosperous West Virginia. If you’re voting for this bill, you’re in favor of West Virginia and expanding our economy.”
Upon passage of the bill, Governor Jim Justice commended the House for its passage and urged members of the Senate to follow suit.
“I thank Speaker Roger Hanshaw, Deputy Speaker Mattew Rohrbach, Majority Leader Eric Householder, Finance Chairman Vernon Criss, and members of the House of Delegates for voting overwhelmingly to pass the largest personal income tax cut in state history,” said Governor Justice. “I encourage the Senate to expediently vote in favor as well.”
“It’s time we reward all the great West Virginians who have stayed the course throughout decades of being 50th. It’s time we really, truly, help West Virginians combat the rampant inflation they’re seeing. We’ve worked really hard to turn our state around from deficits to major surpluses and now our state is blessed with an opportunity for prosperity and growth unlike any before in our history.”
Governor Justice further stated that the tax cut is the “quickest way to return tax dollars to our people,” declaring,
“Cutting our personal income tax will put money in the pockets of hardworking West Virginians and bring prosperity to our state for generations. There is no better incentive than this. Period.” He continued, asserting that the action “puts West Virginia on a pathway to eventually eliminate the personal income tax entirely, which will drive phenomenal growth to our state for generations to come. With the unbelievable economic growth our state has achieved, now is the time to provide this major tax break for our people.”
Additional state legislature coverage from LOOTPRESS can be seen here.