The bill amends the Code of West Virginia to introduce a reduction in personal income tax rates and establishes a framework for future tax rate adjustments based on revenue collections. Specifically, it modifies the effective date for personal income tax reductions to begin on January 1, 2026, and introduces reduced graduated income tax rates. The bill also reduces the tax rates on certain composite returns, nonresident income, nonresident sales of real estate, and lottery winnings. The Secretary of Revenue is tasked with determining if the total fiscal year adjusted general revenue fund collections exceed inflation-adjusted base year revenues, which would trigger a reduction in personal income tax rates starting the second taxable year after the determination.

Additionally, the bill specifies new tax rates for individuals, married couples filing separately, and non-grantor trusts administered by licensed private trust companies, with the tax rate for individuals set at a maximum of 4.58% for taxable years beginning on or after January 1, 2026. The provisions of this section will replace the previous tax rates specified in 11-21-4i of the code. The Tax Commissioner is required to prepare an annual report detailing modifications to the personal income tax and may propose rules for legislative approval to implement these changes.

Statutes affected:
Introduced Version: 11-21-4hof, 11-21-4j
Committee Substitute: 11-17-4b, 11-21-4hof, 11-21-4j
Enrolled Committee Substitute: 11-21-4h, 11-21-4j