CHARLESTON, W.Va. (WSAZ) – There are three proposals to eliminate state income tax for Western Virgins, but two of the three plans would include a significant increase in the sales tax rate.
“It is extremely worrying to me that it is growing now during a pandemic that has seen restaurants and food service providers like me asking for so much money,” said Jeni Burns-Riser, owner of Ms. Groovy’s Kanawha kitchen catering business City. “We were closed, we were reduced to half the capacity, I mean, in one day in 2019 I did three events with a total of 800 people in one day. You made me do weddings for 20 people. “
Currently the Senate version of the bill would increase the sales tax rate by 2.5 percent, which would be in addition to the current 6 percent across the state.
“Every dollar you make has income tax deducted,” said Republican Senator Tom Takubo of Kanawha County. “What we’re saying is we want a small increase in sales tax, but most of what people spend their money on, their mortgage, medical bills, groceries, aren’t taxed on it.”
Legislature hopes the elimination of state income tax will attract more people and businesses to West Virginia to help the state grow. However, Burns said she believes this will do the opposite for business owners like her.
“It would just not be a motivator to stay, in fact it would be a motivator to leave,” Burns told the WSAZ. “I don’t have to be in Charleston, West Virginia to host events in Charleston, West Virginia. I can be in Ironton, Ohio, Ashland, Kentucky.”
She said the fact that she is in a business that can travel makes her people anxious for caterers out of the state, as the tax hike would increase her rates.
“Some of us decided to increase our cost per person because we all had to buy PPE: masks, to-go boxes and all take-away equipment is expensive,” she said. “Then add an increase in sales tax and the customer will just be willing to spend that much.”
The Senate is expected to propose amendments and vote on the wording of the bill during Wednesday’s session.
Currently the House bill is the only plan that wouldn’t increase the sales tax rate; instead it would be taken from the state budget. It would take about 12 years for this plan to take full effect.
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