W.Va. tax collections continued decline in August

W.Va. tax collections continue to fall; sluggish wags, alternative fuel tax credit blamed

Associated Press

CHARLESTON, W.Va. (AP) -- West Virginia tax collections continue to fall, driven mostly by a decrease in personal income tax collections.

Revenue reports show that the state collected $273 million in tax revenue in August, falling $14.4 million short of estimates.

Personal income tax collections totaled $114.6 million, about $4.4 million below estimates. The decline is a combination of sluggish personal income and wage growth and a tax credit program for alternative fuel vehicles, Deputy Revenue Secretary Mark Muchow told media outlets on Tuesday.

The tax credit program originally was meant to provide credits for those who purchased natural gas or propane-powered vehicles, but lawmakers expanded it in 2011 to include any alternative fuel vehicle. Earlier this year, legislators repealed the tax credit but many already had taken advantage of it. Muchow estimated it could cost the state about $100 million.

Severance tax collections totaled $34.3 million in August, $2.8 million below estimates.

But sales tax collections exceeded estimates by about $200,000 for the first two months of the fiscal year that began July 1.

"That's encouraging, because we have the grocery tax elimination in place," Muchow said.

The state collected $2.8 million in corporate income tax collections. $400,000 above estimates.

Revenue from the insurance premium tax fell far short of the estimated $3.8 million as the state collected only $77,000. Muchow attributed the decline to an unusual number of people paying their taxes by the July 25 deadline.

"I guess folks were more efficient in getting the money in coffers," he said.

Overall tax collections for the fiscal year total $570.2 million, $32.2 million below estimates.

But Muchow said the declines don't necessarily indicate budget problems for the fiscal year. September typically is a better indicator as quarterly income tax collections for individuals and businesses are due then.

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