PARKERSBURG - The city would cut business and occupation tax rates and implement a 1 percent sales tax if it's accepted into West Virginia's expanded home rule program.
Parkersburg Mayor Bob Newell will meet with City Council's Finance Committee at 5 p.m. Wednesday to discuss the city's application. That meeting will be held in the small conference room adjacent to council chambers on the second floor of the Municipal Building. It is open to the public.
Newell said the numbers for the B&O tax reductions are still being finalized, but he plans to propose eliminating the tax on manufacturing, while reducing the amount charged for retail, services and electric, light and power. Those amounts are 20 cents per $100 for manufacturing, 40 cents per $100 on retail, 90 cents on services and $2.80 cents on electric, light and power.
The initial cuts are somewhat conservative because the city wants to make sure the lost revenue is offset by the sales tax, Newell said. The 2014-15 budget approved last month by council anticipates more than $10 million in B&O revenue.
The tax would not be charged on fuel, certain food items and other things exempt from the state sales tax.
Finance Committee Chairman Jim Reed said he often gets questions from businesspeople about cutting the B&O tax.
"I think there's a great interest in businesses seeing the B&O reduced because it's on their gross instead of their net," he said. The tax must be paid "whether they make money or not."
State law allows a municipality to charge a business and occupation tax or a 1 percent sales tax. Using some combination of the two is one of the options available under the state's home rule program, which the Legislature expanded from five to 20 participants last year.
"B&O tax is really a pretty horrible tax on businesses," Newell said. "Most cities are relegated to it because we've never had the option to do (anything else)."
A sales tax draws from a broader base, including visitors and non-residents, Newell said.
The mayor noted the cut to B&O on electric, light and power could benefit residents as well. The law allows utility companies to pass those costs along to customers, and he's asking the city attorney to confirm whether the companies are also required to reduce their charge if the tax goes down.
"Eventually, if we can, I want to eliminate the entire B&O on electric, light and power," he said.
The only other item Newell said he plans to include in the city's home rule application is combining the Municipal Building Commission and Board of Zoning Appeals. While the building commission establishes what areas receive what zoning designation, the board hears appeals from property owners seeking a variance.
"It really should just go back to the same body that zoned it a certain way to begin with," Newell said.
The change would allow people to appeal zoning variance decisions to City Council rather than going directly to Wood County Circuit Court. They could still go to court if they wanted to appeal council's decision.
Future home rules policies could be applied for after the initial application is granted, Newell said. For now, he wants the city to keep the proposal simple.
The application is due June 1, but Newell wants to get council members' input on it this week. The city must give 30 days' notice of a public hearing on the application, which requires approval by council on two separate readings before it can be submitted.