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Oct 30, 2006
Governor Outlines Plans for November Tax Modernization Special Session
Contact: Lara Ramsburg, 304-558-2000
CHARLESTON, W.Va. - Surrounded by legislative leaders and a diverse coalition of West Virginia stakeholders, Gov. Joe Manchin today officially received the West Virginia Department of Revenue’s 2006 West Virginia Tax Modernization Project Report and outlined his plans for a November Special Session of the West Virginia Legislature to consider recommendations detailed in this comprehensive report.
Copies of the report were delivered to members of the West Virginia Legislature today for their review. Upon publicly presenting the report at a morning State Capitol news conference, the governor announced that he will call the members of the legislature into special session, beginning Nov. 9, to commence tax modernization work and establish a foundation for these efforts that will continue throughout the regular session in January and in the months and years to come.
“Several months ago, I asked the West Virginia Department of Revenue to embark on an exhaustive study of our tax system looking at how we could not only modernize our current system but also give our taxpayers some relief, so that we could continue to make our state more attractive to both businesses and citizens alike,” the governor said. “Last week, after conducting exhaustive research, holding numerous meetings statewide and speaking with leaders from every constituency, the members of the West Virginia Tax Modernization Project completed their report.”
Joining the governor at today’s news conference were Senate President Earl Ray Tomblin, House Speaker Bob Kiss, representatives from the West Virginia Chamber of Commerce, West Virginia AFL-CIO, West Virginia Council of Churches, AARP-West Virginia, as well as members of the West Virginia Department of Revenue’s Tax Modernization Project work group.
“As I’ve said many times, our tax system did not develop overnight and, as this report shows, it cannot be fully modernized overnight. However, the findings of this workgroup give us a good place to begin,” the governor said.
Highlights of the agenda for the Extraordinary Session include: Continued responsible reduction of the Food Tax by two percent over the next two years, effectively cutting the tax in half from its 2005 level of six percent to a more manageable three percent; creation of a Low-Income Family Tax Credit that removes any disincentive to work by eliminating West Virginia Personal Income Tax on families with incomes below the federal poverty level, positively impacting approximately 100,000 West Virginians; and, increase the Refundable Property Tax Credit for Seniors by doubling the value available for the credit from $10,000 to $20,000, thus providing relief to West Virginia seniors within 150 percent of the poverty level.
In addition to recommendations that will help individual taxpayers, Governor Manchin also is proposing relief for businesses as well – especially West Virginia small businesses that are the lifeblood of the state’s economy – so that they will have more ability to use their financial capital to invest in new job creation or healthcare benefits for their workers.
To that end, the governor also has proposed the following recommendations for legislative action: A Reduction in the Business Franchise Tax to a rate of 0.55 percent, putting $25 million back in to the state’s economy and easing the burden on our vitally important small businesses that mean so much to West Virginia’s communities; a reduction in the Corporate Net Income Tax to a rate of 8.75 percent, which will serve as another signal to the corporate world that West Virginia is truly Open for Business; and, a Contractors’ Sales Tax Exemption for purchases used directly by Manufacturing Facilities to assist manufacturers in their construction efforts, encouraging additional investments in West Virginia.
“These changes, put together, form the next big piece of the puzzle in our Open for Business efforts and show our citizens, our businesses, and our nation that West Virginia is committed to making our state economically competitive,” the governor said.
The bulk of revenue enhancements included in this Special Session plan are based upon making sure out of state residents working or profiting in West Virginia pay their fair share, the elimination of several out-dated loopholes or tax credits that are part of our overall tax modernization efforts, and the taxing of non-healthy food items such as candy, pop and chips at 6 percent as opposed to three percent.
“I am confident that, working together with the legislature, this Special Session Tax Plan will be a success. It will be a success because we’ve once again tried to reach out to bring all sides to the table to work together to do what is right for West Virginia,” the governor concluded.
Details of the governor’s plan for the Special Session are available at www.wvtax.gov/tmp/taxplan.pdf. The 262-page West Virginia Tax Modernization Report is available at www.wvtax.gov/tmp/2006report.pdf.
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