Proposed Gross sales Tax Enhance in West Virginia Not a Gem for Some Companies Information, Sports activities, Jobs
TRIADELPHIA – A Pennsylvania resident recently came to Howard’s Diamond Center in the Highlands to purchase a 4-carat diamond ring. He paid a lower sales tax rate than an Allegheny County retailer.
The ring cost more than $ 18,000. The current sales tax for consumers in West Virginia is 6 percent, which adds another $ 1,100 to the cost.
Allegheny County and Pittsburgh add an additional one percent to the state property tax rate of 6 percent, bringing the tax to 7 percent. Sales tax on the same ring would have been about $ 1,300 there, so the trip to Triadelphia saved the buyer about $ 200.
This week, West Virginia governor Jim Justice proposed cutting the state’s income tax rate by 60 percent.
His proposals to make up for the difference include increasing state consumer sales tax by 1.9 percent.
According to Justice’s proposal, this 7.9 percent would not be the upper limit for luxury items with large tickets. The governor is proposing an additional luxury tax on these items – 3 percent for items between $ 5,000 and $ 10,000, 2.75 percent for items between $ 10,000 and $ 30,000, and 1 percent for items $ 1 million or more.
The $ 18,000 ring under Justice’s plan would fetch $ 1,422 sales tax below a 7.9 percent sales tax, with the additional luxury tax adding an additional $ 500. This would bring the tax on the ring to more than $ 1,900 – far more than the $ 1,300 tax the ring buyer would have paid in Pittsburgh.
Howard Posin, owner of the Howard Diamond Center, does not see such customers traveling to West Virginia to purchase items large or small when the tax goes into effect. He also expects those who live locally to go shopping elsewhere.
“I’m not happy about it at all”, Said Posin. “What is happening is that the poor are paying it (the increased sales tax) and they are the ones who need the money and shouldn’t be paying the higher taxes.
“Rich people don’t pay (income tax) and they have the money.”
Meanwhile, the 4-carat diamonds and other luxury jewelry that are sold in his shop sit in his boxes.
“You won’t sell it” Said Posin. “They’ll buy it in another state. It’s that simple. You can be in Pittsburgh in an hour, so the business leaves West Virginia. “
Ohio County Commissioner Randy Wharton, also president of the Ohio County Development Agency, is also concerned that companies on the West Virginia border with other states will lose out in the deal.
“It puts us in a very bad position and an enormous disadvantage compared to the neighboring counties.” Wharton said. “What if a family wanted $ 5,000 to be used to buy a refrigerator, appliances …? a new television. It’s more tax.
“The people who spend the money and sales tax are workers. This is an additional tax for working families.
“It won’t be good for the Highlands, and it won’t be good for the town of Wheeling. I’ll be surprised if any of this gets through the legislature … you can see your sales go away because of all the people traveling across the borders. “
The City of Wheeling levies an additional 1 percent sales tax on purchases in the city, which increases the Wheeling sales tax to 7 percent currently.
The sales tax in Wheeling would amount to 8.9 percent according to the proposal of the judiciary.
“Obviously, increasing sales tax will be a bigger problem for border counties than for those centrally located in the state.” said Wheeling Mayor Glenn Ellliott, also a member of the Ohio County Development Authority. ”
“In the case of Wheeling and Ohio County in general, I’d be very concerned about hike sales tax enough to drive buyers to Ohio or Pennsylvania. Therefore, it is imperative that our Charleston lawmakers consider the competitive impact of the tax changes they are making. “
Due to Wheeling’s geographic location between Ohio and Pennsylvania, the area would suffer revenue losses, according to Elliott.
“I have concerns about what a 32 percent increase in our federal consumer sales tax could mean for our current and future retail presence.” he said. “I acknowledge that the impetus for the governor’s proposal is a desire to attract external investment and people to our state.
“But I can think of a myriad of other reasons besides our state income tax as to why we have experienced persistent population loss in our region – obviously our failure as a state to diversify our economy to reduce our relative reliance on fossil fuel extraction.”
If the state really wants to reverse the population loss, Elliott said it should make critical investments in infrastructure, broadband, and education and training of the workforce.
“And communities need to focus on improving the local quality of life to attract the kind of workers that 21st century industry demands.” he said. “A stronger shift in the tax burden in the direction of a regressive tax like sales tax will in and of itself not change our fate.”
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