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House of Delegates guts Gov. Justice tax bill

CHARLESTON, W.Va.  — The House of Delegates Finance Committee has gutted a tax revenue bill that was the basis of Gov. Jim Justice’s budget plan.

As originally requested by the governor, House Bill 2816 would have raised the state sales tax to 6.5 percent, up from 6 percent. It also would have removed sales-tax exemptions for professional services, created a new tax on businesses and eliminated state film office tax credits.

But a substitute bill discussed in the Finance Committee on Friday did away with most of the provisions in the governor’s bill.

The version of the bill discussed in committee does keep several of the provisions in Justice’s bill, including eliminating the film tax credits, raising the wholesale tax on a barrel of beer from $5.50 to $8 and transferring about $11.7 million from a special revenue account back into the general fund.

Deputy State Revenue Secretary Mark Muchow said eliminating the film credit would save the state about $3 million a year once existing credits expire. The beer barrel tax increase also would be expected to bring about $3 million a year.

Delegate Larry Rowe, D-Kanawha, offered an amendment to raise the wholesale beer tax to $11 a barrel in an attempt to salvage some of the revenue lost by eliminating most of Justice’s tax plan.

But Delegate Cindy Frich, R-Monongalia, said such a big hike could prompt residents in border counties like hers to cross state lines to buy their beer.

Frich said beer is already cheaper in neighboring Pennsylvania than in Monongalia County.

Rowe’s amendment failed, as did an amendment that would have put off elimination of the film tax credit until 2020.

The Finance Committee voted 15-9 to send the committee’s substitute bill to the full House for a vote.

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