West Virginia sees October tax collections slightly below projected revenue – Parkersburg News

The dome of the West Virginia Capitol is shown in Charleston. (AP Photo/Jeff Gentner, file)

CHARLESTON — Tax collections in October for West Virginia’s general revenue budget for the current fiscal year were nearly four points below projections for the month, but year-to-date collections remain just one point below expectations.

According to the monthly tax revenue report released Friday by the Senate Finance Committee, the $393.6 million in taxes collected in October was 3.67 percent below the $408.6 million tax revenue forecast set by the state Department of Revenue . Revenue for the month was $15 million less than expected, although October tax revenue was nearly 1 percent better than the $390.8 million collected in October 2023.

Year-to-date tax collections for the first four months of fiscal 2025, which began in July, were $1.7 billion, just 0.081 percent below the expected revenue of $1.71 billion, or $13.8 million . Fiscal year-to-date collections are also down 5.99%, or $108.3 million, from last year’s first four months of fiscal 2024, which totaled $1.81 billion.

All but one of the state’s major tax revenue streams were below projections for the month. Personal income tax collections for October of $168.5 million were 8.86% below the forecast of $184.9 million. Fiscal year-to-date personal income tax collections of $701.9 million were 4.55 percent below estimates of $735.4 million.

In 2023, Governor Jim Justice and the Legislature passed a tax reform package reducing personal income tax rates by 21.25% and introducing personal income tax credits for tangible personal property taxes on motor vehicles funds and certain other taxes on tangible personal property of small businesses.

(Graphic by Stephen Allen Adams)

The 2023 tax reform package also introduced a formula to trigger the personal income tax for future cuts. After the end of the 2024 fiscal year, the Department of Revenue determined in August that the state would see a 4 percent personal income tax cut starting in January that would return $92 million to taxpayers when fully implemented.

The judiciary and the Legislature agreed to an additional 2 percent personal income tax cut in a special session in early October, which will also take effect in January and return $46 million to taxpayers when fully implemented. Justice held a signing ceremony for the 2 percent tax cut bill Thursday, bringing the total amount of tax cuts since Justice began in 2017 to over $1 billion.

Despite tax collections remaining close to, sometimes below revenue projections, Justice said in a statement Friday that state revenue officials believe West Virginia is on track to end this fiscal year with a surplus of more than $80 million, which is down from an $826 million surplus for fiscal year 2024 and a $1.8 billion surplus for fiscal year 2023.

“West Virginia’s revenue numbers show exactly what we’ve worked so hard to achieve,” Justice said. “We’re proving that responsible spending and smart tax cuts can go hand in hand.” We’re still on track for another solid surplus that allows Toby and Edith to have more money in their pockets. We were able to reduce over a billion dollars in taxes.

October consumer sales and use tax collections of $125.1 million were 1.69% below the expected revenue of $127.2 million. Fiscal year-to-date sales tax collections of $549 million were 0.07% below the forecast of $549.4 million.

Quarterly distributions to counties and municipalities of severance tax cash collected from coal and natural gas production helped contribute to severance tax collections that missed projections. October benefit tax collections were in the red by $5.7 million, when forecasts had called for collections of $9.8 million. Fiscal year tax compensation collections of $68.5 million were 22% below expected revenue of $87.8 million.

Only corporate net income tax collections beat expectations for the month and fiscal year to date. October’s net corporate income tax collection of $27.4 million was 121% more than the forecast of $12.4 million, providing a surplus of $15 million for the month. Fiscal year-to-date corporate net income taxes of $107.5 million were 11.29 percent higher than the forecast of $96.6 million, delivering a surplus of $10.9 million for the month.

Stephen Allen Adams can be reached at [email protected].