Legislative leaders are pushing back against the governor’s counterproposal on car taxes, saying the idea would cause hassle.
Gov. Jim Justice introduced the proposal this week and called it the “Car and All Vehicle Tax and Elimination and Protection of Local Government Act.” The governor did not describe a timetable for the Legislature to consider such a policy, but his administration did distribute a draft bill.
The governor characterized his proposal as an alternative to Amendment 2 that would give legislators the authority to exempt personal property taxes on vehicles and on what businesses pay for inventory, equipment and machinery.
Justice’s proposal doesn’t exactly eliminate the personal property taxes that people pay annually on their vehicles. Instead, people would pay those taxes as usual and then receive a rebate or a credit toward their state income taxes.
Senate President Craig Blair, R-Berkeley, said the governor’s proposal is cumbersome.
“The governor, in his typical fashion, wants to throw his hands up and say the debate is over, he’s settled it, and you don’t need to vote for Amendment 2 because his plan does the same thing,” Blair said Thursday. “The fact is, he’s wrong. We spent a full day carefully analyzing this bill and considering its implications, and we have several serious concerns.”
The bill indicates that taxpayers would prepare and file an annual schedule of the amount of personal property taxes they’d paid on their vehicles along with the amount of income taxes they have paid to be submitted to the state Tax Commissioner.
Citizens who owe personal income taxes could then receive a credit based on what they have paid for personal property taxes. Credits also could be applied by businesses to corporate net income taxes.
If people pay more on their personal property tax for vehicles than they owe in income taxes, they can claim the amount as a refundable tax credit.
Although the governor has regularly asked whether citizens want to trust the seat of government in Charleston, Blair said this plan would require more interactions with the state Tax
Department.
“It’s offensive to me the number of hoops he wants our residents to jump through to receive the exact same thing that could be accomplished by simply voting for Amendment 2,” Blair said. “He’s trying to say that he wants to keep control out of Charleston? There’s not much more Charleston than sending in a bunch of forms to the State Tax Department and waiting to get your money back.”
Justice has been campaigning across the state against Amendment 2. He has characterized the amendment’s potential relief on vehicles as a sweetener that’s really meant to lead to the break
for businesses.
The governor also has expressed concern over the financial support local governments derive from property taxes, saying all bets would be off with the amendment’s passage. So his proposed alternative would be the tax credit for what people will have paid on their vehicles.
“I’m all in to get rid of your car tax and I just had to figure a way to get that issue out of the way. It is bait. That’s all there is to it,” Justice said this week on MetroNews’ “Talkline.”
House Speaker Roger Hanshaw, R-Clay, said he favors passage of Amendment 2, adding that’s the most direct path to personal property tax changes.
“I think most of us share the view that we want to give some tax relief, and we’re in a time of historic budget surpluses in West Virginia. We expect that to continue for at least another couple of years, and we think it’s prudent to give some of that money back to the people,” Hanshaw said on “Talk of the Town” Thursday on WAJR Radio.
“But I really think the proper way to do that is the simplest of the possible approaches, and that’s just to pass Amendment 2 and move on with a clean repeal of that tax.”
Senate Finance Chairman Eric Tarr suggested the governor’s proposal could wind up causing unintended consequences.
“This ‘plan’ again demonstrates the governor’s inability or refusal to understand the absolute necessity for Amendment 2 in order to eliminate the personal property tax on vehicles,” said Tarr, R-Putnam.
“The governor’s plan would actually incentivize county assessors to greatly increase the assessment on vehicles, knowing that the state would credit those increased amounts back to the taxpayer from the state’s General Revenue budget.”
Democratic legislative leaders earlier this week issued a statement in support of the governor’s proposal. Senate Minority Leader Stephen Baldwin and House Minority Leader Doug Skaff urged action right away.
“Inflation is real. People are hurting now. We fully support eliminating the car tax to help our people. Democrats proposed this idea back in March of 2021. We are glad Gov. Justice is with us in eliminating the car tax. Why wait any longer? Let’s do it now. We call on the WVGOP to join us in providing immediate tax relief for the people in a special session,” the legislators stated.
