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Local officials discuss sales tax increase proposal

Local cities’ rates would be higher than Washington County’s

PARKERSBURG — If West Virginia Gov. Jim Justice’s proposed half-percent sales tax increase is enacted, the rate in Wood County’s municipalities would rise above the 7.25 percent assessed in Washington County.

Local officials are unsure what impact that would have on local sales tax revenue, but they don’t anticipate it being major.

“Whenever it becomes more expensive to buy things in one area than another … it can certainly have an impact,” Parkersburg Finance Director Eric Jiles said. “At this point, we would just have to see what happens.”

Ohio’s state sales tax is 5.75 percent, and Washington County adds 1.5 percent — 1 percent that goes to the general fund and a half percent that is directed to the county sheriff’s office’s criminal division, Washington County Auditor Bill McFarland said.

In West Virginia, the state sales tax is 6 percent. Williamstown opted to enact a 1 percent municipal sales tax in 2010 rather than a business and occupation tax. In 2015, Parkersburg and Vienna were accepted into the state’s expanded municipal home rule program. Both cities sought and were granted approval to implement a 1 percent sales tax the following year in conjunction with reductions to their B&O rates.

Currently, shoppers in all three cities pay a total of 7 percent sales tax on non-exempt purchases, compared to 7.25 percent in Washington County.

Justice pitched raising the state rate to 6.5 percent as a means of generating more than $90 million a year to help close an estimated $500 million budget gap. He also proposed a sunset provision eliminating the hike after three years.

Jill Parsons, president and CEO of the Chamber of Commerce of the Mid-Ohio Valley, said it’s hard to say whether a difference of a quarter of a percent would influence someone to make a purchase in Washington County instead of Parkersburg, Vienna or Williamstown.

“Many things impact purchase patterns for residents in the Mid-Ohio Valley — where you live versus where you work, the type of purchase, the amount of the purchase, for example,” she said. “It is conceivable that the decision on where to make a major high-ticket purchase could be based on an extra fourth of a cent in sales tax, but there are so many variables involved that it would be difficult to ascertain the exact reason.”

Jiles said it would be difficult to forecast the effect of the increase. Parkersburg Mayor Tom Joyce agreed, adding that he expects any potential impact to be “nominal.”

“We need to be conservative in our budgeting and tax receipts anyway so as not to over-extend the city’s resources,” Joyce said.

Vienna Mayor Randy Rapp said he understands the state has a significant problem to address, but “there’s got to be a stopping point somewhere.”

Although he doesn’t want to see a tax increase, Rapp said he doubts the city going from a quarter-percent less than Washington County to a quarter-percent more will affect many buying habits.

“Obviously you don’t want to be the highest (tax rate) in any area … but I don’t think that would be a deciding factor,” he said. “Most people don’t take the time to calculate that out.”

Williamstown Mayor Jean Ford said residents were accepting when the city implemented its sales tax and she expects they will be if the state raises its rate to address the budget deficit.

“We need to be supportive of our state government when we’re behind like we are,” she said. “I just don’t think anybody would really miss that (half a percent).”

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