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CHARLESTON -- August tax collected in West Virginia came in above estimates, but no thanks to the personal income tax months after Gov. Jim Justice and the Republican-led Legislature cut personal income tax rates.
According to the monthly report released by the Senate Finance Committee Friday, August tax collections came in at $410.8 million, which was 5.9% more than the $388 million estimate from the state Department of Revenue, giving the state a $22.8 million surplus two months into the new fiscal year that began in July.
Year-to-date tax collections of $745.8 million were 4.7% more than the $715.2 million revenue estimate, giving the state a $30.5 million surplus. But tax revenues for July and August are 16% below the first two months of the previous fiscal year.
"Once again, our surplus this month proves that we're wisely minding our store and keeping our state on the right track, just as West Virginians elected me to do," said Justice in a statement Friday.
Personal income tax collections for August underperformed the revenue estimate by nearly 10%. August personal income tax collections were $141 million, with estimates set at $155.7 million. Year-to-date personal income tax collections are only barely under the $287.4 million estimate, coming in at $286.6 million.
After negotiations between Justice and lawmakers earlier this year, the West Virginia Legislature passed House Bill 2526. The bill included a 21.25% across-the-board cut in personal income tax rates retroactive to the beginning of January. According to estimates, the personal income tax cut will return approximately $590 million to taxpayers annually. Department of Revenue officials predicted that the effects of the tax cuts would not be seen until the start of the new fiscal year.
Helping keep tax revenues above water was the consumer sales and use tax. August sales tax collections of $159 million were 4.2% above the $152.6 million estimate, bringing in $6.4 million in surplus. Year-to-date sales tax collections of $252.6 million came in just in the black, with the year-to-date estimate set at $251.7 million.
Corporate net income tax collections for August were $8.3 million, outperforming the $2.5 million revenue estimate. Year-to-date corporate net income surplus collections were $14.3 million, with the $27.3 million in collections 110% above estimates.
The severance tax on coal and natural gas also performed well in August, bringing in $41.2 million, or 17.7% more than the $35 million estimate for a $6.2 million surplus for the month. But year-to-date severance tax collections are down. The state brought in $45 million in severance tax collections for July and August combined, 28% below the $62.4 million estimate and 76% below collection this same time last year.
Justice praised August's tax collections while criticizing President Joe Biden, placing the blame on the White House for policies Justice believes are driving inflation and hurting coal and natural gas prices.
"… We're having to fend off constant attacks by the Biden Administration and his radical climate extremists who are dead set on destroying our way of life with their war on coal, oil, and gas," Justice said. "All West Virginians are also seeing the disastrous effects of Bidenomics, with rampant inflation that has driven up the price of everything.
"Despite these cards we're being dealt, West Virginians are remaining resilient, like we always have, and continuing to get our dinner buckets and work hard so that we can put food on the table for our families," Justice continued. "It's what makes me confident that whatever comes our way, we will get through it together, stronger than ever, as West Virginians."