CHARLESTON, WV — The West Virginia House has passed its version of a state income tax reduction bill Monday afternoon.
The measure was introduced on March 23 and was passed by the House six days later with less than two weeks remaining in the legislative session.
House Bill 3300 passed with 77 yeas and 23 nays.
The House’s bill eliminates the income tax but cuts $150 million from the budget each year. It will also establish a Personal Income Tax Reduction Fund.
If the personal income growth in the state is 3%, the measure would expire in 2039. If personal income growth is 2%, the measure would expire in 2040. It would cost $150 million in revenue for the first year starting in 2022.
According to House Bill 3300, for West Virginians who file taxes as Head of Household or single:
- If the West Virginia taxable income is Not over $10,000, then the tax is 2.8% of the taxable income.
- If the West Virginia taxable income is over $10,000 but not over 25,000, then the tax is $280.00 plus 3.7% of excess over $10,000 of the taxable income.
- If the West Virginia taxable income is over $25,000 but not over $40,000, then the tax is $835.00 plus 4.2% of excess over $25,000.
- If the West Virginia taxable income is over $40,000 but not over $60,000, then the tax is $1,465.00 plus 5.6% of excess over 40,000.
- If the West Virginia taxable income is over $60,000 then $2,585.00 plus 6% of excess over $60,000.
West Virginia Gov. Jim Justice also has a version of a state income tax reduction bill. The goal of that plan is to eventually phase out the state’s income tax beginning with a 60% cut next year and then gradually phasing out over the next three years. The plan would also mean raising the state’s sales tax from 6% to 7.9% to make up for the lost income tax revenue.
West Virginia would then have the highest sales tax of any state in the country.
The House bill now goes to the West Virginia Senate.
The Fiscal Note for this bill can be read here.