CHARLESTON, W.Va. (AP) - A legislative committee spent hours Monday brushing up on West Virginia’s tax code as lawmakers look toward possible reforms.
State tax and revenue officials, among others, cautioned the Joint Select Committee on Tax Reform about unintended consequences in retooling taxes.
The committee focused on previous tax reviews under former Republican Gov. Cecil Underwood in 1999 and former Democratic Gov. Joe Manchin in 2006.
Revenue Secretary Bob Kiss said lawmakers must consider budget constraints, and not just the tax structure, in any proposed changes. In 10 years, he said the state has improved to the middle of the road among major state-by-state tax rankings.
Kiss talked about the benefit of making tax changes incrementally, instead of passing comprehensive, immediate changes to the code.
Michael Caryl, who worked on Underwood’s tax committee, said there has been little progress based on the 1999 report. Suggestions included a flatter income tax and fewer exemptions.
The state took steps backward by adding more special exemptions and credits, he said.
Mark Morton, state Tax Department general counsel, said companies looking at West Virginia generally care most about having a market for their product, a qualified workforce and predictability in the tax code. They don’t mind paying a little more in taxes that are stable, he said.
“I think, probably, taxes are fairly far down the list of what a business looks at when they think of coming to West Virginia,” Morton said.
Senate President Bill Cole, R-Mercer, and House Speaker Tim Armstead, R-Kanawha, called for the tax review.
Cole has said the previous tax reviews found West Virginia’s tax system is unfair, complicated and an obstacle to economic growth.
Lawmakers have no specific agenda about what they would potentially change, said Del. Eric Nelson, R-Kanawha and co-chair of the tax reform panel.
“We may come away from this with, ’Hey, everything is just fine,’” Nelson said.
Cole also suggested a tax reform special session. Democratic Gov. Earl Ray Tomblin’s office has expressed concerns about the possible length and costs of that idea.
Otherwise, the Legislature could take up possible reforms during the session starting in January.
The committee meets next on May 18.
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