The Senate met Wednesday afternoon to pass Senate Bill 424, its version of the personal income tax cut plan, a comprehensive piece of legislation that would return roughly $600 million to West Virginians.
The plan impacts an array of the state tax code while assessing needs for prudent state spending going forward. The main elements of this plan include:
- A sustainable personal income tax reduction, starting with a 15 percent decrease in personal income tax
- A rebate for the payment of personal property taxes on vehicles
- A homestead real property tax rebate for 90- to 100-percent service-disabled veterans
- A 50 percent rebate for the payment of equipment and inventory taxes paid by West Virginia small businesses
- Elimination of the “marriage penalty” when filing taxes in West Virginia
The plan also has triggering mechanisms that would continue to decrease the personal income tax as the economy grows. Under the plan, when sales tax collections increase 105 percent over the previous year, it triggers a dollar for dollar income tax reduction of that amount of increase. In effect, the bill creates a smoothing mechanism tied to economic growth that Senators hope will safely bring down the income tax to zero over time.
The bill now heads to the House of Delegates for consideration.
