CHARLESTON, W.Va. – The House of Delegates this past week began work on two potential constitutional amendments that could provide substantial tax relief to veterans and seniors, while also encouraging business investment and job creation in the state.
“These amendments are critical steps in our plan to make West Virginia the best place to live, work and raise a family,” said House Speaker Roger Hanshaw, R-Clay. “If ratified by voters, these amendments would make our tax structure fairer and more attractive to job creators, seniors and those families who have served and sacrificed for our state and country.”
House Joint Resolution 17 would amend the state Constitution to give the Legislature authority to determine how business inventory and machinery is taxed in the state.
West Virginia is one of 14 states to levy some kind of property tax on business inventory or machinery. Ohio and Pennsylvania do not have this tax, and studies dating back to Gov. Cecil Underwood’s administration have identified this tax as one of the biggest impediments to job growth in West Virginia.
“We know this tax is a job-killer, but because it’s embedded in our Constitution, it’s been practically impossible to change it,” said Finance Committee Chairman Eric Householder, R-Berkeley. “If we truly want to diversify our economy and have the job growth seen in states like Tennessee, North Carolina, South Carolina, Ohio or Pennsylvania, we must do something about this tax.”
Chairman Householder, the lead sponsor of the resolution, emphasized House Joint Resolution 17 would not change or repeal the tax. Instead, it would merely give a future Legislature the power to pass bills to reform the tax structure.
“This amendment would simply untie our hands and provide future lawmakers the ability to change this tax,” Chairman Householder said. “We all know we need to reform our tax code, but until we change our Constitution, we’ll never be able to make the true changes that can unlock the economic potential of our state.”
A second proposed amendment – House Joint Resolution 18 – would provide tax relief and stability for West Virginia seniors and veterans. The proposal would modify the structure of the Homestead Exemption, which is a form of property tax relief currently provided to seniors and disabled residents.
The current Homestead Exemption law exempts the first $20,000 of the value of a senior or disabled person’s home from personal property taxes.
House Joint Resolution 18 would provide additional relief by locking in the assessed value of a home to whatever it is when the resident turns 65, or the day an older person moves into a new home. That amount would be the maximum value a home could be assessed at for property tax purposes for however long that person lives in that home. The resolution is designed to protect seniors from increases in property taxes as their home goes up in value over time.
Additionally, the amendment would completely exempt the value of a permanently disabled veteran’s home for property tax purposes.
“Many people on fixed incomes across the state have struggled with increases in property taxes over the years as booms in regional housing markets have driven up home values,” said House Committee on Government Organization Chairman Gary Howell, R-Mineral, who is the lead sponsor of the resolution.
“While the Homestead Exemption is a great relief for seniors and the disabled, its effect is reduced when home values go up,” Chairman Howell said. “By locking in a maximum value for a person’s home on the day they turn 65, this amendment will protect our seniors and veterans from the natural inflation in the housing market.”
Both resolutions were taken up and approved by the House Finance Committee this past week. They will now be referred to the House Judiciary Committee for further consideration before being reported to the House floor.
Since they are constitutional amendments, they will need to be approved by two-thirds of members of the House and Senate – 67 members in the House and 23 members in the Senate. If adopted, the proposals would then go before the voters in the next election for approval or rejection.
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In addition to the two constitutional amendments, Chairman Householder said the Finance Committee next week would take up a bill phasing out the income tax on Social Security benefits.
West Virginia is one of just 13 states that tax Social Security income, and House leaders have made eliminating this tax a priority for this session.
“This bill will provide much-needed tax relief to seniors,” Chairman Householder said. “We want to make West Virginia the best place to not only raise a family, but stay together as a family as we grow older. This tax repeal will give our working-class families more income and stability during their retirement.”