Tax Reforms Take Effect Jan 1 in Huntington; Major Component Remains in Litigation

Edited from a Press Release
HUNTINGTON, W.Va. — Manufacturers, retailers and service businesses in the City of Huntington will see business and occupation (B&O) taxes reduced or eliminated effective January 1, 2012. This is a part of the tax reform package approved by City Council in August 2010; the reductions are projected to reduce taxes on businesses by nearly $4 million annually. Manufacturing B&O taxes will be eliminated; retail B&O taxes will be halved to 0.25% of sales; and service B&O will be halved to 0.50% of sales. These reductions will be offset by the implementation of a 1% municipal sales and service and use tax (municipal sales tax) to begin Jan. 1, 2012.

Mayor Kim Wolfe notes, “The reduction of business taxes is a positive step toward creating jobs in the City. The elimination of manufacturing taxes helps our existing manufacturers and aids in the recruitment of other high wage paying employers.”

An injunction in Kanawha Circuit Court remains in effect for the 1% municipal occupation tax that was to begin July 1, 2011. The injunction has delayed the start of the occupation tax and keeps in place the $3.00-per-week city service fee paid by all those who work in the City. The injunction does not apply to the municipal sales tax.

The municipal sales tax is collected by businesses directly from consumers and remitted to the West Virginia State Tax Department along with the state sales tax. Huntington will be the second municipality in the state to implement a municipal sales tax; Williamstown began its sales tax on Oct. 1. Inquiries about the specifics of the municipal sales tax should be directed to the State Tax Department at 1-800-982-8297.

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