W.Va.'s state tax rates ranked among the lowest
The Register-Herald, Beckley, W.Va.
With tax day looming, it's easy to get bogged down in how much we owe the state and federal government, and groan.
But the truth is West Virginians don't have it so bad tax-wise, according to a study by The Tax Foundation, a Washington D.C., based think-tank. It does, however, suffer from low population to bear the tax burden and from nearly the lowest per capita income in the nation.
Mountain State residents work until April 10 to pay their tax burden, the study says. Compare that to Louisiana, where residents work only until March 30 and to New Jersey, where May 9 is the release date for Garden State folks.
West Virginia runs at the middle of the pack in several tax categories.
Each state resident is responsible for $3,160 in taxes to keep the state in roads, schools, police forces and fire protection. That puts West Virginia at 19th, less than half of the leader, New York at $6,622, and not that far from No. 50, Wyoming at $3,500.
The state collects $2,898 for each individual, though, and is ranked 17th for tax collections. North Dakota is No. 1 in tax collections at $7,848, and New Hampshire is 50th with $1,777 for per capita collections.
As for its oft maligned business climate, West Virginia is ranked overall at 21 by the Foundation. That number reflects the state's rank on Corporate Taxes (17), Individual Income Tax (26) and Sales Tax (25), Unemployment Tax (23) and Property Tax (25).
Wyoming was ranked first overall, and first in both Corporate Tax and Individual Income Tax, but was 35th in Property Tax. New Jersey was ranked 50th, meaning the Garden State is the least favorable for business, and was also ranked last for Property Tax.
In terms of general revenue, West Virginia's $4 billion budget is made up of five tax categories, excluding gasoline and fuel taxes.
The state gets 20 percent of its income from property taxes, 18 percent from general sales tax, 25.5 percent from individual income taxes and 3.5 percent from corporate income taxes. Lawmakers abolished the sales tax on groceries and reduced its corporate income tax by 1 percent last year. More than 34 percent of the state's revenues come from federal aid. According to The Tax Foundation, West Virginia is 16th in federal aid, with Mississippi at No. 1 (42.9 percent) and North Dakota at No. 50 (19 percent).
West Virginia's 6 percent sales tax rate is ranked 16th in the nation, tied with neighboring Pennsylvania. California has the highest sales tax rate at 7.5 percent, and Georgia, Hawaii, Louisiana, New. York, South Dakota and Wyoming all tie for last place with a sales tax rate of 4 percent. Alaska, Delaware, Montana, New Hampshire and Oregon do not have sales taxes.
Mountain State residents generally spent enough to bolster the state's coffers at $677 per capita in 2013, leaving it at No. 32 in the nation. Hawaii, with that low 4 percent rate, gathered $2,108 for each resident two years ago. Colorado collected only $446 per resident that year.
According to the Foundation, Hawaii's sales tax structure is broad-based and includes many services, so is not "strictly comparable to other states."
West Virginia's highest ranking, 9th, is in gasoline tax. That 34.6 cent tax per gallon is broken down into 20.5 cents in excise taxes and 14.1 cents in other taxes and fees. Pennsylvania has the highest state gasoline tax at 50.5 cents per gallon. Alaska is 50th in gasoline taxes with only 8 cents in excise taxes and 3.3 cents per gallon in other taxes and fees.
The state's 40th ranking is in share state and local road spending covered by tolls and user fees and taxes. With only three toll sites along the southern route, charging $2 a stop ($1.25 with an EZPass), the state is only 13th for tolls, with 7.7 percent of its spending coming from toll revenue. However, 30.2 percent of its spending comes from gasoline and license taxes, hiking the rate of spending from those sources to 37.9 percent.