State Tax Problems

WV Lawmakers to Correct Problems With Vehicle Tax Credit

WV Lawmakers to Correct Problems With Vehicle Tax Credit

West Virginia lawmakers are set to correct problems with a vehicle tax credit that officially goes into effect January 1, 2024. 

WV Metro News reported on the situation, noting that the current issue stems from legislation that was passed earlier this year. The state Congress passed a tax cut package that will save individuals and small businesses a total of over $750 million a year on their taxes.

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Credit: Walter Bibikow/Getty Images

One of the most popular provisions in the package allows West Virginians to receive "a dollar-for-dollar credit on their income taxes for the personal property tax on their vehicles." The annual vehicle tax is among the state's least popular taxes, with many opponents referring to it as the "13th car payment."

The somewhat complex credit allows for West Virginia residents to use the sum of their paid vehicle tax against the amount they owe to the state or, in some cases, as an addition to their state tax refund. 

West Virginia legislators issued an official document explaining the tax credit. It states:

Only individuals and business motor vehicle owners may qualify for the Motor Vehicle Property Tax Adjustment Credit. The credit is only available for the actual tax paid. If an early payment discount is applied, the credit is limited to the amount actually paid after deduction of the discount.

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Furthermore, taxpayers who do not owe West Virginia income taxes or who are not required to file a state return can claim a rebate for their vehicle taxes in early 2025 according to the law.

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Credit: Jodi Jacobson/Getty Images

 The aforementioned problems arise because The Mountain State's vehicle property taxes are paid according to the fiscal year calendar but income taxes are filed based on the calendar year. Although the vehicle tax credit won't go into effect until January 1, 2024, tax bills for the last fiscal year are already being delivered to taxpayers. 

Per WV Metro News's report, "state and county officials have tried to spread the advice that taxpayers should only pay half now, so that when they pay the second half in early 2024, they can claim that second half amount as a dollar-for-dollar credit on their 2024 taxes."

This has not, however, had much of an effect and people are paying their taxes in full by sheer force of habit.

House Speaker Roger Hanshaw (R-Clay) recently said, “The fact that people do the responsible thing and pay their tax bill in full is a good thing. That’s not something that I think that we ever want to intentionally disincentivize.”

Hanshaw, Senate President Craig Blair and Justice Administration representatives are devising an alteration to the law that will allow those who pay in full now to claim the credit on the second half of the payment.

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Credit: krblokhin/Getty Images

This change may be voted on during the special legislative session set to run concurrently with the interim committee meetings that began yesterday, Sunday, July 30.

What do you think about this correction to the Motor Vehicle Property Tax Adjustment Credit?

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Feature Image Credit: Lady-Photo/Getty Images

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Rebekah Barton

Rebekah Barton

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