West Virginia’s personal income tax to drop by 4% next year, Gov. Justice says

CHARLESTON, W.Va. (AP) — West Virginians will see their personal income taxes drop by 4% in the new year, Gov. Jim Justice said.

The Republican governor announced Thursday that state revenues had met the threshold to trigger the reduction, set to take effect Jan. 1. The decision was certified by Revenue Secretary Larry Pack and State Auditor JB McCuskey.

The cut comes after Justice signed a 21.25% income tax reduction last year. According to the 2023 law, additional state income tax cuts can be triggered by a formula involving higher-than-anticipated annual revenue collections. Those further tax reductions cannot be larger than 10%.

Justice has stressed that he wants to see the personal income tax eliminated to promote economic growth in one of the nation’s poorest states, and he has tried repeatedly to persuade state lawmakers to cut the tax completely. The 2023 law, which takes a more measured approach, was a compromise between the executive and the state Legislature.

“While it won’t happen during my time as your Governor, our state is on a pathway to eliminating its personal income tax — so, let’s keep the ball rolling in the same direction,” Justice said in a statement Thursday. “We all know, at the end of the day, getting rid of the personal income tax will bring more goodness and more people to our beautiful state.”

Justice said last month that he anticipated the income tax dropping by around 4% starting next year, but that he wanted to call lawmakers back to the Capitol for a special session to consider a further cut of 5%. The governor has not yet made a special session call or set tentative dates for lawmakers to return to the Capitol, so it’s unclear whether that will happen.

The West Virginia Center On Budget and Policy has urged caution on further tax cuts, saying the personal income tax is the state’s largest source of revenue and that years of flat budgets have meant education and childcare needs have gone unmet.