MORGANTOWN – You may have seen one of those cartoons where someone in a carnival shooting gallery fires at the duck and ping, it goes right, then ping, back to the left, and ping again, back to the right.
The journey through the Senate of HJR 3, the Property Tax Modernization Amendment, has been roughly the same. It originated as a means to grant the Legislature the authority to set personal property tax rates for vehicles and for business inventory, equipment and machinery.
It took an about-face in Senate Judiciary Monday night then took another about-face Tuesday in Senate Finance, which restored it to its original form.
As it came from the House, it proposes a constitutional amendment that, if approved by the voters in November 2022, would allow the Legislature in the future to phase out the tax on business inventory, equipment and machinery, and eliminate the property tax on vehicles.
Judiciary changed it to an amendment to allow a county commission to impose a 1% anywhere within the county in lieu of imposing a property tax on business equipment or inventory, automobiles or other tangible personal property. Each commission could choose.
The Legislature would have the authority to enact necessary legislation to effectuate the county sales tax option and to determine the distribution of the sales tax revenue among the levying bodies within the county.
In Fiscal Year 2020, property taxes brought in about $1.926 billion. From that, $8 million went to the state, $516.8 million to the counties, $1.272 billion to the schools and $114.74 million to the municipalities. It’s been estimated that elimination of the business inventory, machinery and equipment tax would reduce revenue by up to $400 million and eliminating the vehicle tax would trim another $80 million to $100 million.
Jonathan Adler, executive director of the West Virginia Association of County Officials, said he didn’t know the impact of the change but they’ve been concerned about losses to counties under the various property tax proposals, with no plan to replace lost money and no place at the table for them.
Some said during discussion that some counties may see more revenue through a countywide sales tax, and it preserves local control.
It passed Judiciary in a divided voice vote, with the no votes a clear minority.
Without explaining why, Senate Finance on Tuesday restored the House version.
Adler also appeared before Finance and told them some of the more rural counties with no significant business presence outside their municipalities might not see much gain from the 1% tax.
HJR 3 as restored by Finance passed in a voice vote; no votes against were audible. It now goes to the full Senate.
TWEET David Beard @dbeardtdp EMAIL dbeard@dominionpost.com
