West Virginia 2021 Proposed Tax Bill: Summary
West Virginia Governor Jim Justice’s tax bill is expected to be introduced soon in the West Virginia House and Senate. If it passes as drafted, it would make the following changes:
It would increase the consumer sales tax from 6% to 7.9%
Natural gas severance tax would change from 5% to tiered rates based upon the annualized gross value of natural gas, with the rates ranging from 4% to 7%. It would also change the wet gas severance tax from 5% to 6.5% to tiered rates.
It would change the coal thin seam severance tax rate from 1% or 2% to a tiered rate structure, and it would change the coal severance tax from 3% (steam) and 5% (metallurgical) to tiered rates, ranging up to 7%.
It would reduce personal income tax by 60% on income earned from wages and salaries, pensions, annuities, IRAs, social security and unemployment. However, that reduction does NOT apply to income from the following: Schedule C Business Profits, Schedule E rents, royalties and pass-through entity profits, Schedule D Capital Gains, Schedule F farm income, supplemental gains and losses, taxable interest income, dividend income, or miscellaneous income.
It would increase the tax on soft drinks.
It would increase the tax on cigarettes, e-cigarettes, and tobacco products.
It would increase the tax on beer, wine, and liquor.
It creates a new excise tax on “luxury items.” Luxury items are defined as “jewelry, including watches, and timepieces, clothing, including fur garments and millinery items, art work, furniture, including clocks and electronic equipment and appliances, motor boats, snowmobiles, ATV’s, yachts, and airplanes, and collections.”
It would charge consumer sales tax on professional services including legal services and accounting services. However, it would exempt from the new professional services tax medical services and veterinary services.
To read the draft bill as proposed, click here: https://governor.wv.gov/Documents/Governor-Tax-Bill.pdf
To read an abstract of the proposed bill prepared by the Governor’s Office, click here:
https://governor.wv.gov/Documents/Governor-Justices-State-Income-Tax-Repeal-Plan-Bill-Abstract.pdf
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