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Food Tax Elimination to Save West Virginians $162 million
On July 1, families will have saved $162 million a year since the beginning of the phase-out. The average family of four will save $52 a year due to the last one percent tax rate reduction.
"Many hard-working West Virginians live within a budget, and in order to eliminate the food tax, West Virginia had to do the same. In balancing our own budget, the Rainy Day Fund reached 12.5 percent of the General Revenue Fund at the end of December 2012. By meeting this goal, we can take the final step to eliminate the food tax", Gov. Tomblin said.
During his time as Senate President, Tomblin and then-Gov. Manchin initiated the phase-out of the 6 percent food tax in 2005. The food tax has been steadily reduced, hitting 3 percent in 2008 and 1 percent last year. In 2011, Gov. Tomblin signed legislation that established a plan to eliminate the food tax by July 1, 2013.
"The elimination of the food tax is part of a larger effort to make the tax system fairer, efficient and balanced for both families and businesses", Acting State Tax Commissioner Mark Matkovich said. "Governor Tomblin's actions have leveled the playing field for businesses in our border counties and given them a competitive advantage among our neighboring states".
The phase-out eliminates the sales and use tax on the purchase of food and food ingredients. The elimination does not apply to the purchase of prepared food, vending machine food or soft drinks.
For more information on the elimination of the food tax visit www.wvtax.gov.