CHARLESTON, W.Va. — West Virginia’s Republican-controlled House on Friday voted to cut state income taxes on military pensions and Social Security benefits and increase the personal exemption for incomes below $100,000.
The legislation approved 74-17 would extend the state’s 6 percent sales tax to cell phone and some other services. It’s projected to raise about $100 million to help close the state government’s budget deficit in the fiscal year starting July 1.
“It’s a work in progress and a way to break the log jam,” said Delegate Brent Boggs, a Braxton County Democrat. The bill came out of the House Finance Committee with minority input, he said.
The House and Democratic Gov. Jim Justice have disagreed over taxes and budget cuts for the fiscal year that begins July 1. The latest legislation shows some movement by the House, which previously voted against a bill with broad income-tax cuts.
It still differs sharply from legislation pushed by Justice and approved by the Republican-controlled Senate to cut all income tax rates by 20 percent and exempt military pensions. That bill would also broaden the sales tax and raise it to 6.95 percent, increase the net corporate income tax from 6.5 to 7.5 percent and establish graduated severance taxes for coal, with cuts for operators mining thin seams.
House Finance Committee Chairman Eric Nelson said their cuts would affect 98 percent of tax-paying West Virginians who have incomes under $100,000 a year. The Social Security provision would be phased in starting in 2018. The individual exemption for all taxpayers below that income threshold would increase by $500 to $2,500.
It would leave the 5 percent severance tax on coal intact.
Delegate Isaac Sponaugle, a Pendleton County Democrat, said the House bill will help the West Virginians who need it most while the Senate tax cut would benefit the wealthy.
Delegate Patrick McGeehan, a Hancock County Republican, opposed the bill, saying it simply represents a $100 million overall tax increase.
Both houses are scheduled to return next week. Senate Republicans earlier this week voted down an amendment from that chamber’s Democrats that would have exempted Social Security benefits instead of the broader tax cut.