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West Virginia tax collections take slight dip in August

(Graphic by Steven Allen Adams)

CHARLESTON — Two months into fiscal year 2026, August general revenue fund collections in West Virginia came in slightly lower than estimates, but year-to-date collections remain in the black.

According to the monthly report released by the state Senate Finance Committee released Tuesday morning, general revenue fund tax collections for August came in at $396.9 million, 1.24% below the $401.9 million estimate set by the state Department of Revenue and 1.71% below August tax collections during the previous fiscal year.

Despite August tax collections coming in below estimates, combined tax collections for July and August — the first two months of the current fiscal year — were $785.1 million, or 2.25% above estimates and 6.22% above $739.1 million during the first two months of fiscal year 2025. The state is ahead of collections by $17.3 million.

“Today’s revenue numbers are good news for West Virginia, as the additional $17.3 million in year-to-date revenue over expectations will help us address future fiscal challenges,” Gov. Patrick Morrisey said in a statement Tuesday afternoon. “With our known challenges, including increases in mandatory spending, we must continue to make smart fiscally conservative decisions in our own state budget planning for the best outcome for our citizens.”

Personal income tax collections and consumer sales and use tax collections helped keep state collections from going too far into the red.

August personal income tax collections of $143.1 million was 4.10% above the $137.4 million revenue estimate, adding $5.6 million to fiscal year-to-date surplus tax revenue. But when compared to August 2024 tax collections, they were down by $8 million or 5.35% below collections this time last year.

Fiscal year-to-date personal income tax collections of $291.5 million were 5.1% above the $277.4 million estimate, but 1% under the $294.1 million in collections during the first two months of fiscal year 2025. West Virginia has seen three cuts in personal income tax rates: a 21.25% cut that went into effect in 2023, and a 4% and 2% cut that went into effect at the beginning of calendar year 2025.

Speaking last week during the West Virginia Chamber of Commerce 89th Annual Meeting and Business Summit, Morrisey said he was still working towards future decreases in tax rates to be more competitive with neighboring states.

“We have to continue to build…to create a more competitive tax structure,” Morrisey said. “There have been some good things done in that area. We have to go a lot further, once again, taking that Backyard Brawl concept and saying, in all the key areas to have competition, you have to have lower taxes on the type of issues that motivate people to live in West Virginia, to work here, to play here.”

“August revenue collections continued a strong performance, especially in our broad-based sales and personal income taxes, an indication of our growing economy in West Virginia,” said Department of Revenue Cabinet Secretary Eric Nelson. “I’m particularly impressed with the 8.4% increase in August Consumer Sales Tax collections compared with last year. Even though total monthly revenues were short of estimate due to some delays in receipt of severance tax collections due at month-end, I remain encouraged because these collections are higher than prior year collections through August.”

August consumer sales and use tax collections of $179.8 million was 8.35% above the $166 million estimate and 8.21% above August 2024 collections of $166.2 million, providing the state a $13.9 million surplus for the month. Fiscal year-to-date sales tax collections of $316.6 million was 3.21% above the $306.8 million estimate, for a $9.8 million surplus for July and August combined. Sales tax collections were also 22.3% collections compared to July and August of the previous fiscal year.

Dragging down the state’s tax collections for August and fiscal year-to-date were poor corporate net income tax collections and severance tax collections.

August corporate net income tax collections showed a deficit due to refunds being sent out. Corporate net income tax revenue for the month ran a -$362,000 deficit when collections were estimated to exceed $1.1 million. However, the state collected $21.9 million fiscal year-to-date in corporate net income tax revenue, 53.2% above the $14.3 million estimate, though 8.1% below the $23.9 million in collections at this point in the previous fiscal year. The state is sitting on $7.6 million in corporate net income tax surplus.

August collections for the state severance tax on coal, oil and natural gas was $29 million, which was 43.5% below the $51.4 million revenue estimate, though 14.2% better than August 2024 collections of $25.4 million. Fiscal year-to-date severance tax collections of $30.5 million was 44.5% below fiscal year-to-date estimates and 6.8% below similar collections during the previous fiscal year of 28.5%.

Steven Allen Adams can be reached at sadams@newsandsentinel.com.

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