That was the consensus of a panel of House and Senate Finance Committee members participating in a discussion on tax code legislation, as part of the West Virginia Press Association’s 2018 Legislative Lookahead on Friday.
House Finance Chairman Eric Nelson, R-Kanawha, called the personal property tax on business inventory the biggest single hindrance to bringing economic development and jobs to the state.
West Virginia is one of 10 states that tax business inventory.
Nelson said legislative leadership is committed to reducing the tax, which provides counties with about $530 million a year in revenue, by $140 million. That’s consistent with Senate President Mitch Carmichael’s proposal to phase-down the tax by $20 million a year over seven years.
However, Delegate Brent Boggs, D-Braxton, urged the Legislature to proceed cautiously, citing recent history, when it eliminated the sales tax on food and the business franchise tax, and rolled back the corporate net tax rate — and blew a $400 million a year hole in state budgets, causing budget impasses the past three years.
“We’ve got to be very careful and learn from the lessons of the past, and not do something we can’t afford,” Boggs said.
Delegate Mick Bates, D-Raleigh, said it is critical that the Legislature replace lost revenue from the tax cut, since the revenue primarily goes to fund county school systems.
Bates also wasn’t convinced that reducing inventory taxes is absolutely necessary.
“Business appears to be doing well, and looks like they will be doing quite well under the federal tax plan,” he said.
Sen. Ed Gaunch, R-Kanawha, noted that Commerce Secretary Woody Thrasher has called the inventory tax the most onerous tax that the state levies on businesses. …
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