West Virginia Gov. Justice signs tax package into law

As Justice held up a signed copy of the bill, gold and blue balloons rained down from the ceiling of the West Virginia State Culture Center Theater.

“It’s so much better, in life and in anything that we do, when we do it as team,” Justice said. “Everybody wins — whether it be the House, the Senate, the Governor’s Office, all the great people in the state of West Virginia — when everybody is on the team. It’s a great, great, great day in this state.”

The negotiations surrounding the tax package have been one of the major narratives of this year’s regular legislative session, which is set to end at midnight Saturday.

“I’m glad we were finally able to come to an agreement to provide tax relief,” said House Majority Leader Eric Householder, R-Berkeley, after legislative action on the bill was completed. “This tax cut is historic, but more importantly, it puts us on a path toward the total elimination of the personal income tax, which is where we want to be.”

House Bill 2625 started out as the tax plan Justice outlined in his 2023 State of the State address — a 50% reduction in the state’s personal income tax rate over the course of three years.

The Senate responded with its own proposal, which called for a 15% personal income tax reduction.

The Senate proposal also called for elimination of the income tax “marriage penalty,” a rebate for personal property taxes on vehicles, a homestead real property tax rebate for service-disabled military veterans and a 50% rebate on equipment and inventory taxes paid by small businesses.

On Feb. 25, the Senate Finance Committee passed a strike-and-insert version of HB 2625 that includes a 21.25% personal income tax reduction, a homestead tax credit for service-disabled military veterans, a 50% refundable credit for personal property taxes paid on vehicles and a 50% refundable credit for small businesses on personal or corporate net tax income for personal property.

The bill also includes triggers for further personal income tax reductions, limited to 10% per year, that would go into effect if and when the state meets certain general revenue collection benchmarks.

The final version of the bill received near unanimous support. All members of the Senate voted to pass it. In the House, four Democrats voted nay.

The initial House plan would have returned around $1.3 billion to taxpayers. The initial Senate plan would have returned around $600 million. The version of HB 2526 now codified into law will return about $750 million.