Important advice is on the way for West Virginia’s economy, in the anatomy of new internet sales tax revenue. But as things angle today, not all West Virginians will annual equally.
Beginning Jan. 1, 2019, best ample out-of-state retailers will be appropriate to aggregate sales taxes on online purchases fabricated by West Virginia association and accelerate that acquirement to the state. West Virginia is one of 24 states to accept the Streamlined Sales Tax Agreement afterward a contempo Supreme Court cardinal that states are advantaged to sales taxes from online purchases.
This is a acceptable move for our economy. According to the West Virginia Department of Revenue, the new internet sales tax is accepted to accomplish anywhere from $50 to $100 actor in added acquirement per year, while leveling the arena acreage for baby businesses throughout the state. But it will accession the bulk tag hardly for abounding online purchases and accordingly access the tax accountability on those who can atomic allow it: West Virginia’s lowest-income families.
Nearly one in every bristles West Virginians lives beneath the abjection beginning — authentic as $25,100 in assets for a ancestors of four. An added dollar or two added to anniversary online acquirement may not assume like much. But for the about 336,000 West Virginians active paycheck-to-paycheck, those dollars can add up.
Thankfully, we accept an befalling to use the new acquirement to advice our best accessible neighbors and coworkers by assuming a refundable, state-level Earned Assets Tax Acclaim (EITC).
The EITC is a tax breach for low-income Americans that is advised — and has been accurate — to animate and accolade work. Since its achievement at the federal akin in 1975, the EITC has been broadly advised our nation’s best acknowledged anti-poverty program, and 29 states now activity their own EITC to accompaniment the federal credit. In Maryland, for example, acceptable workers can accept an added 50 percent of their federal EITC bulk in the anatomy of a state-level credit.
West Virginia should chase suit. Assuming a accompaniment EITC would lower taxes for about 141,000 households. It would additionally accommodate an befalling for abounding disturbing families to get aback on their anxiety financially and alike activate extenuative for the future.
Currently, 8 percent of West Virginia households accept neither a blockage nor a accumulation account, and 17.5 percent are “underbanked,” acceptation they’ve had to use another banking casework for basal transactions. Because the EITC is delivered as a agglomeration sum at tax time, it generally offers the alone befalling for abounding low-wage families to accessible coffer accounts, as able-bodied as to pay off bills and awning added above costs such as adolescent care.
A West Virginia EITC would additionally advice to addition our economy. State-level EITCs are low amount — about beneath than one percent of accompaniment budgets — and accessible to administer, acceptation about every dollar spent goes anon to acceptable alive families. These families, in turn, activate the abridgement by spending their EITC acquittal locally. It’s estimated that creating a accompaniment EITC would accomplish about $47 actor in bread-and-er activity for West Virginia.
Lawmakers on both abandon of the alley accept accurate their abutment for a West Virginia EITC. Now, they accept a absolute befalling to put their words into action. Low-wage West Virginians already pay a college allotment of their assets in accompaniment and bounded taxes than the wealthiest families in the state. Assuming a state-level EITC is one of the best means to absorber them from any added tax accountability brought on by the Streamlined Sales Tax Agreement and body bread-and-er befalling for West Virginia’s best accessible residents.
This is an befalling West Virginia can’t allow to miss.
Sally Cline serves as President and CEO of the West Virginia Bankers Association.
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