The West Virginia Manufacturer’s Association gave a presentation to the Joint Economic Development Committee regarding the potential elimination of the business inventory tax.
Rebecca McPhail, president of the association, told the committee how eliminating of the tax on manufacturing machinery and equipment would create a more competitive economy for West Virginia.
She said the proposed tax repeal would create more manufacturing jobs in the state, and the industry is already a big part of the state’s economy. McPhail projects that the tax repeal would bring more people into the state and help the retention of state population by attracting manufacturers.
“We are at a critical time in developing the long-term future economy of West Virginia,” McPhail said.
West Virginia is one of two states with the business inventory tax. McPhail argued the tax makes West Virginia one of the worst states for capital intensive manufacturing.
The association proposed phasing the tax out over a number of years to be determined by the Legislature. A draft resolution presented Monday to the Joint Standing Committee on Finance proposed phasing out the tax over four years at a cost of $100 million which the state would have to backfill for counties.
There was concern from several legislators regarding the logistics of this bill. Delegate John Doyle, D- Jefferson, questioned how the hole in the budget from the tax repeal would be substituted without shifting the burden to other individuals and smaller businesses.
McPhail cited natural revenue growth, saying phasing out the tax over a few years would allow growth to offset the difference in the budget without shifting to other resources.
Doyle believes that replacement money needs to be found before relying on natural revenue growth to cover the difference.
This tax repeal has been proposed to legislators in previous years. The proposed resolution would be a constitutional amendment, requiring two-thirds approval from both chambers before going to voters in the next election to approve the measure.
WVMA President Presents Tax Repeal
