Gov. Justice will Again Propose Ending State Income Tax

September 28, 2022

Mountaineer News

WV STATE GOVERNOR

CHARLETSON, WV - West Virginia officials are again working on drafting a bill to phase out West Virginia’s income tax, which will be introduced to the legislature, Secretary of Revenue Dave Hardy announced late Tuesday afternoon.

“We are starting the process right now, in 2022, of proposing to the West Virginia legislature that we start phasing out West Virginia’s state income tax,” Hardy said during a news conference with Gov. Jim Justice. “...That’s our goal and that’s where we’re going. The goal of this governor and this administration is to eliminate the state income tax in West Virginia as soon as we possibly and fiscally responsibly can do that.”

Hardy said the bill would first cut the state income tax by 10%, which would immediately save taxpayers $271 million. He did not announce other specifics on the bill or say when the governor would send the plan to lawmakers.

The governor introduced legislation to end the state income tax last year. Although House and Senate leadership both supported a plan to end the tax, lawmakers could not reach an agreement on how the state should do it. He introduced another bill during this year’s regular session that would immediately reduce the income tax, which passed the House and did not receive a vote in the Senate. He then called a special session to introduce similar legislation, which also passed the House and did not receive a vote in the Senate.

Hardy argued that if West Virginia phased out its income tax, it would be more welcoming to teleworkers, which are now a large part of the workforce.

“Telework is not the future, telework is now,” Hardy said. “And what we’ve found out is teleworkers will go where taxes are low.”

In addition to promoting an income tax cut, Hardy criticized a proposed amendment to the state constitution, which will appear as a referendum on the November ballots. Amendment 2 would allow the legislature to approve exemptions for certain business property taxes imposed by local governments, such as machinery taxes. It would also let lawmakers approve property tax exemptions for vehicles.

Hardy said those exemptions would be costly and would prevent the state from ever phasing out the income tax.

“This plan, and I’ll use this term, would shipwreck the state of West Virginia’s budget and I don’t use that term lightly,” Hardy added. “It’s a plan that would probably cost … the general revenue budget of the state of West Virginia about $600 million.”

After the Senate failed to hold a vote on the income tax legislation during the last special session, the chamber approved a resolution that stated the body would approve tax exemptions if voters vote in favor of Amendment 2.

Justice said during the news conference that exempting certain business property taxes would not ensure growth, but that cutting the state income tax would. He said big corporations will benefit from this amendment, but that no one else would. The governor added that he might support ending the vehicle property tax, but not through Amendment 2.

Voters will get to decide the fate of Amendment 2 on their ballots on Nov. 8.