Pub 2 2021 Issue 1

Issue 1 2021 9 WVADA ◦ Schedule D Capital Gains ◦ Schedule F Farm income ◦ Supplemental Gains and Losses ◦ Taxable Interest Income ◦ Dividend Income ◦ Miscellaneous Income This bill will increase taxes as follows: Total Tax Increase: 902,600,000 • Increase consumer sales tax from 6%-7.9% (excludes automobiles) • Will begin taxing professional services • Create a luxury items tax for certain specified items (excludes automobiles) • Change natural gas severance tax from 5% to a tiered rate system • Increases wet gas severance tax from 5% to 6.5% • Increases the coal thin seam severance tax rates from 1% or 2% to a new tiered structure • Increases the coal severance tax from 3% on steam and 5% on met and other coal to a tiered rate structure • Changes oil severance tax from 5% to a tired rate structure • Increases the cigarette tax to $2.25 per pack • Increases taxes on alcohol and e-cigarettes • Increases soft drink taxes on fluids, syrup and dry mixture House of Delegates Version H.B. 3300 – Relating to Personal Income Tax (PIT) This bill is much different from the Governor’s PIT bill, S.B. 600. HB 3300 was originated in the House Finance Committee and the bill passed on straight party lines 77 to 23. This bill is a much shorter version (11 pages) than the Governor’s 75-page version. This bill does not increase any taxes, and it slowly reduces PIT based on gross income over a 10-12-year period. This bill creates an Income Tax Reduction (ITR) Fund to accelerate its pursuit of a full personal income tax elimination. The ITR will also serve as an additional reserve of funds to safeguard against downturns in the economy. Revenues will build up in the ITR through various means/sources. Senate’s Version The Senate has amended and passed H.B. 3300. The House would have to concur with the Senate’s amendment; however, the Governor has already stated that he will not accept this version of the bill. The Senate’s amendment has a number of revenue generating measures: (Total tax increases: $932,050,000) ($1,047,000,000 estimated shortfall) • Increase in consumer sales tax from 6% to 8.5% • Removes certain exemptions from sales and service tax • Implements a 3% tax on certain professional services • Increases a tax on tobacco and tobacco products • Adds a hotel occupancy fee and tax • Reinstates a food tax at 2.5% • Creates 8.5% sales tax for prepared foods • Modifies the soft drink tax • Creates a dedicated lottery scratch-off game • Legalizes recreational cannabis that would be subject to the sales and use tax ◦ Cannabis would also be subject to a special excise tax of 10% per ounce of the wholesale price Lastly, I want to remind everyone of our upcoming Dealer Family Convention, June 13-16 this year at the Greenbrier. We are all excited and looking forward to getting together this year. We have a great agenda planned and encourage each of you to attend. You can find more information on our website, or feel free to contact me. Hope to see you soon! t WV is the first state in the nation to implement this innovative program that will truly help build up our blue- collar workforce. Delegate Jordan Bridges (R-Logan, 24) giving a thumbs up after taking a test drive in the 2019 Ford Shelby F-150.