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Introduced Version - Originating in Committee Senate Concurrent Resolution 78 History

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SENATE CONCURRENT RESOLUTION 78

(By Senators Tarr, Sypolt, Baldwin, Boley, Clements, Hamilton, Ihlenfeld, Jeffries, Maroney, Martin, Nelson, Plymale, Roberts, Stollings, Swope, Takubo, and Unger)

[Originating in the Committee on Finance; reported on April 10, 2021]

 

Requesting the Joint Committee on Government and Finance conduct a study on the structure of West Virginia’s business and occupation tax focusing on its fairness, categories of products and services either exempt or subject to the tax, and alternative sources of income to the tax.

Whereas, Only three states in the United States impose a business and occupation tax.  These states are Ohio, Washington, and West Virginia.  Alabama imposes a similar tax known more simply as an occupation tax, making these states outliers in the country in this form of taxation; and

Whereas, The State of Ohio is currently in the process of phasing out their business and occupation tax, leaving only Alabama, West Virginia, and Washington with a similar tax; and

Whereas, A business and occupation tax in West Virginia is a tax imposed on the privilege of engaging in certain business activities in a municipality.  It is collected on gross receipts with no deductions. It has varying rates which are dependent on the classification of the business.  Additionally, the rates differ from city to city; and

Whereas, West Virginia has primarily eliminated the business and occupation tax on the state level municipalities, however, continue to impose and collect the tax and it is a major source of income and revenue for them; and

Whereas, The business and occupation tax, although a revenue generator for municipalities, it is seen as a business deterrent to businesses operating within the boundaries of a municipality.  It encourages businesses, most notably automobile dealers, to either locate or relocate their businesses outside the corporate limits of the municipality; and

Whereas, Alternative forms of revenue should be explored to keep the budgets of West Virginia’s cities whole but which are seen as an impediment to businesses who wish to locate and operate within the city limits; and

Whereas, At the very least a more uniform structure and application of the business and occupation tax across all classes of property and services should be explored; therefore, be it

Resolved by the Legislature of West Virginia:

That the Joint Committee on Government and Finance is here by requested to study on the structure of West Virginia’s business and occupation tax focusing on its fairness, categories of products and services either exempt or subject to the tax, and alternative sources of income to the tax; and, be it

Further Resolved, That if elimination is not seen as viable, that the structure and application of the tax be reviewed for uniformity; and, be it

Further Resolved, That mayors, city managers, business owners, and the Tax Department should be consulted on alternatives to the tax that retain the level of funding generated by the business and occupation tax, but that do not act as a constraint for business with a desire to locate within a city; and, be it

Further Resolved, That the Joint Committee on Government and Finance should seek input from officials from the State of Ohio on their experience and seek their guidance on a means to proceed with a phase out and potentially total elimination of the business and occupation tax in West Virginia; and, be it

Further Resolved, That the Joint Committee on Government and Finance report to the regular session of the Legislature, 2022, on its findings, conclusions, and recommendations, together with drafts of any legislation necessary to effectuate its recommendations; and, be it

Further Resolved, That the expenses necessary to conduct this study, to prepare a report, and to draft necessary legislation be paid from legislative appropriations to the Joint Committee on Government and Finance. 

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