CHARLESTON - Eliminating the tangible personal property tax is one of the top priorities in the West Virginia Legislature this year, according to legislators at the West Virginia Press Association's Legislative Lookahead on Friday in Charleston.
A tax on movable property like furniture, computers, cars and inventory, the tangible personal property tax only affects businesses, and Speaker Tim Armstead, R-Kanawha, said he believes it is the biggest hindrance to being able to recruit new businesses.
The biggest roadblock to eliminating the tax is a lot of the funds go to the public schools and the money would have to be made up elsewhere. Armstead said he has been working with the counties and schools to come up with a plan.
Armstead's plan is to phase out the tax over seven years, costing about $20 million a year. Armstead said he believes the money can be made up with efficiencies made elsewhere in government.
"For the first time, we have real potential to have everyone on board and start on the road to eliminate this tax," Armstead said. "At least we will be moving in the right direction."
The West Virginia Chamber of Commerce is in favor of eliminating the tax. Senators, including current chief of staff Mike Hall, proposed legislation to eliminate it in 2011, but the measure did not make it on the ballot.
Changing the tax law will require a constitutional amendment, thus it must be approved by two-thirds of the Legislature.
Despite Gov. Jim Justice's push for a tiered severance tax last year, Del. Ed Gaunch, R-Kanawha, and Del. Mick Bates, D-Raleigh, said they hadn't heard any talk of that being brought back up this year.
Sen. Eric Nelson, R-Kanawha and chairman of Finance, said they learned their lesson last year to not include tax structuring in the budget bill, saying it should be worked out in interim meetings or in a special session.
No legislator could also name any revenue bills that might be introduced, and they all said additional taxes to cigarettes would not be pushed for this year.
In general, the legislators in the tax panel were optimistic about the upcoming session because they are not heading into it with a budget crisis hanging over their heads. Estimates for the year have been on target so far and the state has actually generated about 6 percent more than expected in general revenue.
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