WEST VIRGINIA LEGISLATURE
2024 SECOND EXTRAORDINARY SESSION
Introduced House Bill 237
By Delegates Hanshaw (Mr. Speaker) and hornbuckle
(By Request of the Executive)
[Introduced ; referred to the Committee on the ]
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1 A BILL to amend and reenact §11-21-4h of the Code of West Virginia, 1931, as amended; and to
2 amend said code by adding thereto a new section, designated §11-21-4i, all relating to
3 personal income tax; modifying the effective date of future personal income tax reductions;
4 providing for reduced graduated income tax rates; reducing the rate of tax on certain
5 composite returns; reducing the rate of withholding tax on nonresident income; reducing
6 the rate of withholding tax on the nonresident sale of real estate; reducing the rate of
7 withholding on lottery winnings; applying reduced rates beginning on and after January 1,
8 2025; providing for contingent additional future reductions in the personal income tax rates
9 when certain criteria have been met; making technical corrections; and providing effective
10 dates.
Be it enacted by the Legislature of West Virginia:
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-4h. Future personal income tax reductions.
1 (a) For the purposes of this section, the terms defined in this section have the meanings
2 ascribed to them unless a different meaning is clearly required by the context in which the term is
3 used:
4 (1) "Adjusted consumer price ratio" means the fiscal year consumer price index divided by
5 the base year consumer price index.
6 (2) "Adjusted general revenue fund collections" means all net general revenue fund
7 collections minus the net general revenue fund collections related to the imposition of the taxes
8 imposed under the provisions of §11-13A-1, et seq. of this code.
9 (3) "Base year revenues" means actual general revenue fund collections for 2019 fiscal
10 year, which is $4,293,884,754
11 (4) "Base year consumer price index" means a 12-month average of the not seasonally
12 adjusted Consumer Price Index for all urban consumers for the months between July 2018 and
13 June 2019.
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14 (5) "Excess fiscal year general revenue fund collections" means the positive difference
15 from subtracting the inflation adjusted base year revenues from the adjusted general revenue fund
16 collections from the immediately preceding fiscal year.
17 (6) "Fiscal year consumer price index" means a 12-month average of the not seasonally
18 adjusted Consumer Price Index for all urban consumers for the months between July and June of
19 the immediately preceding fiscal year.
20 (7) "Inflation adjusted base year revenues" means the base year general revenue fund
21 collections multiplied by the adjusted consumer price ratio.
22 (b) Future personal income tax rate reductions. — Beginning on August 15, 2024 2025,
23 and every August 15 thereafter, the Secretary of Revenue will determine whether the total fiscal
24 year adjusted general revenue fund collections from the immediately preceding fiscal year are in
25 excess of the inflation adjusted base year revenues. If the total fiscal year adjusted
26 general revenue fund collections from the immediately preceding fiscal year are in excess of the
27 inflation adjusted base year revenues, then there will be a reduction in the personal income tax
28 rates as determined under this section beginning in the next taxable year the second taxable year
29 following the determination.
30 (c) Determination of rate. — In order to determine the amount of a personal income tax
31 reduction, the excess fiscal year general revenue fund collections will be divided by the amount of
32 the immediately preceding fiscal year’s total personal income tax collections for all funds and will
33 be rounded down to the nearest whole percentage. The amount of the percentage of reduction will
34 be applied equally across the tax rates applicable in the tax year immediately preceding the rate
35 reduction: Provided, That reduction in personal income tax rates may not result in an amount
36 larger than a 10% reduction in the rates set forth in §11-21-4e of this code.
37 (d) Certification of reduction. – The Secretary of Revenue and the State Auditor will certify
38 to the Tax Commissioner that a rate change is required under this section as soon as possible after
39 August 15 so that the Tax Commissioner may notify taxpayers of any change in personal income
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40 tax rates. The certification will provide base year revenues, the total fiscal year general revenue
41 fund collections from the immediately preceding fiscal year, the base year consumer price index,
42 the fiscal year consumer price index, the adjusted consumer price ratio, the amount of inflation
43 adjusted base year revenues, the amount of excess fiscal year general revenue fund collections
44 and the amount of the immediately preceding fiscal year’s total personal income tax collections for
45 all funds.
46 (e) Applicability of this section. — The provisions of this section shall be applicable in
47 determining the rates of tax imposed by this article and shall apply for all taxable years beginning
48 on and after January 1, 2025 2026, and shall be in lieu of the rates of tax specified in §11-21-4g
49 §11-21-4i of this code.
50 (f) Annual Reports. — The Tax Commissioner shall prepare an annual report to the Joint
51 Committee on Government and Finance detailing any relevant modifications to the personal
52 income tax.
53 (g) Rulemaking. — Notwithstanding any provision of this code to the contrary, the Tax
54 Commissioner may propose rules for legislative approval in accordance with the provisions of
55 §29A-3-1 et seq. of this code explaining and implementing this section.
§11-21-4i Rate of tax — Taxable years beginning on and after January 1, 2025.
1 (a) Rate of tax on individuals (except married individuals filing separate returns),
2 individuals filing joint returns, heads of households, and estates and trusts. — The tax imposed by
3 §11-21-3 of this code on the West Virginia taxable income of every individual (except married
4 individuals filing separate returns); every individual who is a head of a household in the
5 determination of his or her federal income tax for the taxable year; every husband and wife who file
6 a joint return under this article; every individual who is entitled to file his or her federal income tax
7 return for the taxable year as a surviving spouse; and every estate and trust (except non-grantor
8 trusts administered by licensed private trust companies created pursuant to the provisions of §31I-
9 1-1 et seq. of this code) shall be determined in accordance with the following table:
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10 If the West Virginia taxable
11 income is: The tax is:
12 Not over $10,000 2.22% of the taxable income
13 Over $10,000 but not over $25,000 $222 plus 2.96% of excess over $10,000
14 Over $25,000 but not over $40,000 $666 plus 3.33% of excess over $25,000
15 Over $40,000 but not over $60,000 $1,165.50 plus 4.44% of excess over
16 $40,000
17 Over $60,000 $2,053.50 plus 4.82% of excess over
18 $60,000
19 (b) Rate of tax on married individuals filing separate returns. — In the case of husband and
20 wife filing separate returns under this article for the taxable year, the tax imposed by §11-21-3 of
21 this code on the West Virginia taxable income of each spouse shall be determined in accordance
22 with the following table:
23 If the West Virginia taxable
24 income is: The tax is:
25 Not over $5,000 2.22% of the taxable income
26 Over $5,000 but not over $12,500 $111 plus 2.96% of excess over $5,000
27 Over $12,500 but not over $20,000 $333 plus 3.33% of excess over $12,500
28 Over $20,000 but not over $30,000 $582.75 plus 4.44% of excess over $20,000
29 Over $30,000 $1,026.75 plus 4.82% of excess over
30 $30,000
31 (c) Rate of tax on non-grantor trusts administered by licensed private trust companies. – In
32 the case of non-grantor trusts administered by licensed private trust companies created pursuant
33 to §31I-1-1 et seq. of this code, there is no tax imposed by §11-21-3 of this code.
34 (d) Effect of rates on Nonresident Composite and Withholding Obligations —
35 Notwithstanding any provision of this article to the contrary, for taxable years beginning on and
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36 after the date specified in subsection (e) of this section, whenever the words "six and one-half
37 percent" appear in §11-21-51a, §11-21-71a, §11-21-71b, or §11-21-77 of this article, with relation
38 to a tax return of, or the tax rate imposed on income of individuals, individuals filing joint returns,
39 heads of households, and estates and trusts (except non-grantor trusts administered by licensed
40 private trust companies created pursuant to the provisions of §31I-1-1 et seq. of this code), the
41 stated percentage shall be changed to 4.82%.
42 (e) Applicability of this section. — The provisions of this section shall be applicable in
43 determining the rates of tax imposed by this article and shall apply for all taxable years beginning
44 on and after January 1, 2025, and shall be in lieu of the rates of tax specified in §11-21-4g of this
45 code and as those rates were modified by the application of §11-21-4h of this code in 2024.
46 (f) Applicability of §11-21-4h of this code. – The Legislature finds that in August 2024, the
47 Tax Commissioner issued an administrative notice reducing the tax rates imposed by §11-21-4g of
48 this code for all taxable years beginning on and after January 1, 2025, pursuant to application of
49 §11-21-4h of this code. The Legislature intends that the provisions of the enactment of this section
50 in 2024 supersede the tax rates set forth in §11-21-4g of this code and set forth in the
51 administrative notice. It is the further intent of the Legislature that §11-21-4h of this code continue
52 in full force and effect as amended.
NOTE: The purpose of this bill is to modify the personal income tax.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.
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Statutes affected:
Introduced Version: 11-21-4h, 11-21-4i