Inventory Tax: Phasing out tax will make state attractive
As West Virginia works to make itself more welcoming to job creators, critics continue to accuse reformers of promising too much. Some previous efforts did not result in an immediate economic boom, so why are we still trying?
No one ever said remaking the state’s economy would be a magic-bullet event. It is a process that, especially as other states adapt to compete, must be ongoing.
Part of that process must be doing away with West Virginia’s personal property tax on business inventories and machinery. That will be a top priority during this year’s regular session of the state Legislature, leading lawmakers said last week, during the annual Legislative Lookahead event sponsored primarily by the West Virginia Press Association.
Many businesses consider the tax the most onerous one they have to pay in the Mountain State — one of just 10 states that still taxes business inventories.
Eliminating the levy is a daunting task, however. It raises about $530 million a year.
About 90 percent of that goes to school systems, municipalities and counties. Pulling that fiscal rug out from under them would be irresponsible.
A strategy that may be implemented during the legislative session is phasing out the tax. One proposal is to reduce it by $140 million, cutting $20 million a year during a seven-year period.
That is doable. Surely lawmakers and Gov. Jim Justice can find $20 million to replace revenue foregone by taking the first step of that initiative.
Phasing out the inventory tax will help many existing businesses be competitive, safeguarding existing jobs. And it — along with other business-friendly actions by legislators and the governor — will make the state more attractive to new employers. Continuing that process is imperative.