By JESS MANCINI
The Parkersburg News and Sentinel
PARKERSBURG, W.Va. — A trade group in West Virginia also believes a tax reform bill will drive customers across borders while a sponsor says counties in states without an income tax outperform their cross-state neighbors.
West Virginia Senate Bill 335 creates an 8-percent consumption tax to replace the sales tax that would also be levied on groceries, which presently are not taxed. The bill, among other provisions, also reduces the personal income tax to 2.5 percent.
Among provisions is an increase in the beer barrel tax from $5.50 to $11. The 41-cent tax on a six-pack would double — and that by itself is a concern of the West Virginia Beer and Wine Association of Wholesalers, but the consumption tax coupled with gasoline tax increases and other increases will drive up the cost of delivering the product, Executive Director Phil Reale said.
“The issue becomes West Virginia will have the highest consumption tax in the country in a state with the lowest per-capita income,” Reale said.
Retailers in counties bordering other states will lose customers who will shop where they can buy goods and services cheaper, he said.
“It’s all the other taxes that will cause the consumer to go somewhere else to buy all manner of commodities,” Reale said.
But there’s a big picture, said Sen. Mike Azinger, R-Wood.
Border counties in states where there is no income tax or income is taxed at a low rate do better than counties in states where the sales tax or general consumption tax is lower but the income tax is higher, Azinger said.
“These states are the most prosperous states in the country,” Azinger, a sponsor of the bill, said. More than half of the 34 members of the Senate are sponsors.
Earlier this month, two bills were introduced in the House of Delegates — House Bill 2934, which would impose a 5.1-percent flat personal income tax, and House Bill 2933, which would reduce the sales tax to 5.5 percent, but would expand what would be taxed. Groceries still would not be subject to sales taxes.
Both bills are pending in the House Finance Committee.
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