By March 17, 2017 Read More →

Representatives agree that proposed Senate Bill 335 would impact businesses

By JONATHAN WEAVER

The Exponent Telegram

CHARLESTON, W.Va.  — A West Virginia Senate proposal to repeal the state sales tax and several other taxes would affect small businesses and buying habits, elected leaders agree.

The bill’s sponsor, Sen. Robert Karnes, R-Upshur, said several updates and revisions have been made to proposed Senate Bill 335 since it was introduced Feb. 16, but that it is necessary.

“I believe the economics help drive (the proposed legislation),” Karnes said. “West Virginia is in desperate need — it’s all about creating jobs.”

Nearly 20 other state senators are co-sponsoring the proposed legislation, including fellow District 11 Sen. Greg Boso, R-Nicholas.

“I think it was easy for them to sign on because they knew it was the right thing to do,” Sen. Karnes said.

Sen. Mike Maroney, R-Marshall, District 2, reportedly asked to be removed as a co-sponsor Wednesday during discussion in Charleston.

Karnes thought many of his colleagues across the aisle would also be in favor of Senate Bill 335.

“What I’ve seen was that there is a pretty broad acknowledgment that they need to see changes,” Karnes said. “There’s a realization that West Virginia wants something different.”

The proposed legislation was considered in the Tax Reform Committee Tuesday, a committee of which Karnes is chair.

Karnes believes the new legislation would impact small business owners “in a positive way,” but officials at the National Federation of Independent Business in Charleston and Sen. Michael Romano, D-Harrison, think otherwise.

“I believe that that interest is misguided,” Romano said. “It would take money out of the hands of working people and increase the liability of those making less than $70,000 and give a tax break to those making more than $200,000.

“That’s backwards to me, because if we don’t put money in the hands of working people, demand for local goods and services decreases, providing less demand for new employment.”

National Federation of Independent Business state Director Gil White had concerns about the plan to phase out the personal income tax while raising the sales tax by 33 percent.

“The plan to eliminate the personal income tax by 2033 would have a big impact on small-business owners, who typically pay taxes at the individual rate as pass-through entities rather than at the corporate rate, but we have big concerns over the proposal to replace West Virginia’s 6-percent sales tax with an 8-percent general consumption tax.

“That would essentially raise the sales tax by 33 percent, and that would have a tremendous impact on people’s buying power,” White said. “It also would put West Virginia retailers along the border at a real competitive disadvantage. “

White and Romano (who represents about 105,000 residents in Braxton, Clay, Gilmer, Harrison and Lewis counties) also thought the sales tax might prompt residents to move elsewhere, such as neighboring Pennsylvania, Maryland or Virginia.

“The sales tax will make our border counties less competitive with the surrounding states and likely cause buyers to cross over state lines to purchase big-ticket items to avoid the sales tax,” Romano said. “Conversely, we will not see out-of-state residents coming into the state to buy our goods and services with a higher sales tax that could be purchased in their own state.”

The proposed legislation is the first Republican bill of its kind reviewed in as many as 30 years due to voting results.

Senate Bill 335 is one of the several bills Harrison County Chamber of Commerce President Katherine Wagner is watching as it moves within committees.

“We will continue to closely monitor it,” Wagner said. “If (a bill) starts to get movement, it starts to really draw attention.”

Wagner is also closely monitoring other proposed legislative items revolving around budget and taxes.

Other upcoming legislation considered includes an amendment to the state constitution regarding property tax. With a two-thirds approval, that amendment could be considered by local taxpayers as soon as this fall.

West Virginia is the 17th lowest taxed state in the United States.

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