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CHARLESTON -- Despite the first two months coming in slower, West Virginia ended the first three months of the new fiscal year with a modest tax revenue surplus, pleasing Gov. Jim Justice and state revenue officials.
According to the monthly report released Monday by the Senate Finance Committee, West Virginia ended the first three months of fiscal year 2024 with $1.4 billion for the general revenue fund, which was 19.8% more than the $1.2 billion estimate by the state Department of Revenue, giving the state more than $233 million in excess tax revenue since the new fiscal year began in July.
September tax collections of $672.1 million was 43.7% more than the $467.9 million revenue estimate, giving the state a $204.2 million surplus for the month and the largest monthly surplus to date. Tax collections for September were also 5.2% more than September 2023 tax collections of $638.8 million.
Speaking Friday during his weekly administration briefing at the State Capitol Building, Justice acknowledged that tax revenues came in slower for July and August after ending fiscal year 2023 in June with more than a $1.8 billion tax revenue surplus.
Personal income tax revenue was the biggest driver of tax revenue in September. Personal income tax collections for the month of $320.9 million was 53.8% more than the $208.7 million estimate, resulting in a $112.2 million surplus for September - or nearly 55% of the state's total September tax revenue surplus. Year-to-date personal income tax collections of $607.5 million was 22.5% more than the $496.1 million revenue estimate for a $111.4 million year-to-date surplus.
"The driving force behind these numbers is one thing, and that is the personal income tax collections are substantially up," Justice said.
"September came on like gangbusters," said Department of Revenue Cabinet Secretary Dave Hardy.
Earlier this year, the West Virginia Legislature passed House Bill 2526, which included a 21.25% across-the-board cut in personal income tax rates retroactive to the beginning of January. Revenue officials project the tax cuts and rebates in HB 2526 could return as much as $793 million by fiscal year 2025 and as much as $829 million by fiscal year 2026.
"Despite that gigantic cut, that historic cut … we are now even, absolutely even with income tax collections compared to where we were a year ago," Hardy said. "That means we have grown our personal income tax income by about 20% if you view Sept. 30th of 2022 against Sept. 30th of 2023."
Corporate net income tax collections for September of $98.7 million was 131.1% more than the $42.5 million estimate for a $56.2 million surplus for the month. Year-to-date corporate net income tax collections of $125.9 million was 126.9% more than the $55.5 million revenue estimate, resulting in a $70.4 million surplus.
Consumer sales and use tax revenue in September was $161.9 million, which was 7.5% more than the $150.6 million estimate for a $11.3 million surplus for the month. Year-to-date sales tax collections of $414.5 million was 3% more than the $402.3 million estimate for a $12.2 million surplus for the months of July, August, and September combined.
Tax revenue for the severance tax on coal, natural gas, and oil also came in above estimates for the second month in a row, though collections for the first three months of fiscal year 2024 remain below projections. September severance tax collections of $27.5 million was 19.1% more than the $23.1 million estimate for a $4.4 million surplus for the month. But year-to-date collections of $72.5 million were 15.3% below the $85.5 million estimates.