West Virginia Gov. Jim Justice wants to get rid of personal income tax in the state and offset it by increasing sales tax by 2% and a luxury tax on items over $5,000
- The proposal would reduce the income tax by 60% for the first year and repeal it completely in three years
- Justice said the plan would generate over a billion dollars in revenue for the Mountain State and the ability to provide some residents with cash rebates
- In order to eliminate the personal income tax, Justice said that the sales tax would increase from 6% to 7.9%
- Other taxable areas would also see changes, including alcoholic and soft drinks, tobacco products, and professional services
West Virginia Gov. Jim Justice wants to get rid of personal income tax offset it by increasing the state consumer sales tax by about 2% and adding a tax on luxury items that cost $5,000 or more.
The proposal would reduce the income tax by 60% for the first year and repeal it completely in three years – while generating over a billion dollars in revenue for the Mountain State and the ability to provide some residents with cash rebates.
In order to eliminate the personal income tax, Justice said that the sales tax would increase from 6% to 7.9%, Fox Business reported.
Gov. Jim Justice hosts a panel of business leaders from across West Virginia for a meeting to discuss his plan to repeal the state personal income tax
According to a press release, Justice hopes repealing the state income tax will draw in more residents – as the state has seen population decrease in recent years
Justice claimed in a tweet that the proposal will give residents more ‘net-positive dollars in their pockets’
Justice also wrote on Twitter that the tax changes will ‘fast track’ the state to a successful future
It would also expand sales tax to include computer hardware and software, advertising, electronic data processing, gym memberships and professional services – including legal and accounting services.
The proposal would also affect the state’s soft drink tax for the first time since 1951, as well as tobacco products and alcoholic beverages.
A pack of cigarettes or like product would see a new $2.25 excise tax, up from $1.20, according to the bill text. A 31-gallon barrel of beer would now have a $29.25 tax – up from $5.50. Bottled soft drinks would see a 6 cent tax – up from just 1 cent.
‘We’ve got a strong economy, the state is right side up, and with this, it will take us to another level beyond belief,’ Justice said.
West Virginians who make less than $35,000 annually would get a tax rebate check, which WVNews reported would be about $1,483.
‘So we came up with $52 million in cash rebates to those people, so they can pay a little more in consumer sales tax … and still end up with money in their pocket,’ Justice said, according to Fox News.
If the proposal is passed into law, Justice said checks would nearly double by the third year.
‘You’d be from the planet Mongo if you didn’t think something would come,’ Justice said, according to WVNews.
Justice hopes that the tax proposal will bring people to the state which has seen its population decrease 3.8% between 2010 and 2020, marking the steepest rate of population decline in the country, according to a press release.
‘It could be an avalanche of people coming to move to West Virginia because we don’t have an income tax. We know some will come, and that will help.’
Other states with no income tax include: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.