The Senate Select Committee on Tax Reform has approved a bill to repeal the personal income tax over the course of four years to be recommended to the floor with the recommendation that it do pass.
The bill, SB 335, would replace income tax revenues with a general consumption tax that broadens the consumer sales tax by an additional two percent and gets rid of most sales tax exemptions.
Senator Craig Blair, R-Berkeley, proposed four changes to the bill as one amendment, which was accepted without further amendments by the committee.
The first change would increase the soft drink tax from 1 cent to 5 cents, to increase proceeds to the West Virginia University School of Medicine.
The second would raise the price markup of liquor to 36 percent from 28 percent to bring in nearly $13 million for the state, as opposed to the original $6.5 million.
The third would increase the price of beer barrels to $11 from $5.50 each.
The fourth would exempt social security from taxable income to decrease fiscal burdens on the senior citizen population of the state. Committee counsel suggested the fiscal impact to the state would be around $90 million.
These tax measures would be effective July 1, 2017.
Senator Robert Karnes, R-Upshur, Chair, said the amendment works with the bill’s intention to stay revenue-neutral.
“This stays roughly within that guideline,” Karnes said.
The bill will be referred to Senate Finance once reported to the full Senate.
