January 13, 2015

West Virginia

State & Local Taxes in 2015


West Virginia Tax Code Features

Progressive Features

• Graduated personal income tax structure

• State sales tax base excludes groceries

• Provides a refundable property tax “circuit breaker” credit to low-income taxpayers via the income tax

• Requires the use of combined reporting for the corporate income tax

Regressive Features

• Local sales tax bases include groceries

• Fails to provide a refundable Earned Income Tax Credit (EITC)

• Fails to provide refundable child tax credits

• Fails to index personal income tax exemptions or brackets to infla­tion

Tax Changes Enacted in 2013 & 2014

• Reduced corporate income tax rate from 7.0 to 6.5 percent

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, West Virginia has the 42nd most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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