West Virginia Taxes: A Look at the State Tax System

West Virginia’s state government relies on a variety of taxes from both individuals and commercial enterprises to fund public services. The tax system is composed of several distinct parts, including levies on income, general consumption, and property. These different forms of taxation work together to generate revenue for state and local operations. The specific application and rates of these taxes are determined by state law.

West Virginia Individual Income Tax

The calculation of West Virginia’s individual income tax begins with a taxpayer’s federal adjusted gross income (AGI), which is the starting point for determining state tax liability. From the federal AGI, taxpayers can apply specific state-level modifications, known as subtractions, to arrive at their West Virginia taxable income. This figure is then used to calculate the final tax amount based on the state’s progressive tax brackets.

A significant recent development in the state’s tax policy is a multi-year reduction in personal income tax rates. Legislation signed in 2023 initiated a phased-in cut, with further automatic reductions tied to state revenue performance. For the 2024 tax year, the rates range from 2.36% to 5.12%. A subsequent reduction is scheduled for January 1, 2025, which will lower the rates to a range of 2.22% to 4.82%.

West Virginia has five income tax brackets. These bracket thresholds are doubled for those who are married and filing a joint return.

The state also provides subtractions that can lower a taxpayer’s taxable income. A notable subtraction is for Social Security benefits, which are being phased out of the tax base. This subtraction increases to 65% in 2025 and will reach 100% in 2026. Additionally, taxpayers aged 65 or older can deduct up to $8,000 of income from certain retirement sources, a benefit that can be claimed by each spouse for a total of $16,000 on a joint return.

West Virginia offers several tax credits to reduce the final tax owed. The Homestead Excess Property Tax Credit is a refundable credit of up to $1,000 for lower-income homeowners whose property tax exceeds 4% of their gross household income. Another is the Senior Citizen’s Tax Credit for Property Tax, a refundable credit for low-income individuals aged 65 or older who participate in the Homestead Exemption program. Eligibility for this credit is tied to income levels based on federal poverty guidelines.

State and Local Sales and Use Tax

West Virginia imposes a statewide sales and use tax on the consumption of many goods and services. The general state rate is 6%, which applies to a broad range of transactions.

In addition to the state-level tax, some municipalities are authorized to levy their own local sales tax, which can add up to 1% on top of the state rate. Consumers and businesses can find a current list of participating jurisdictions and their specific rates through the West Virginia State Tax Department.

The applicability of the sales tax is broad, covering most retail sales of tangible personal property and a selection of services. Common taxable items include furniture, clothing, electronics, and prepared food from restaurants. However, the state provides several exemptions that impact daily life for residents.

Among the most significant exemptions are those for unprepared food, often referred to as groceries, and prescription drugs. Most healthcare services, such as doctor visits and hospital care, are also exempt from the state sales tax. A use tax, at the same rate as the sales tax, applies to purchases made from out-of-state sellers who do not collect West Virginia sales tax.

The Property Tax System

Property taxes in West Virginia are a local affair, administered and collected entirely at the county level to fund schools, law enforcement, and other local services. The system covers both real property, which includes land and any structures on it, and personal property. Personal property tax applies to tangible items such as vehicles, motorcycles, boats, and equipment used by businesses.

The process begins with the county assessor, who is responsible for determining the appraised market value of all property within the county. West Virginia law stipulates that property is assessed at 60% of its appraised value, and this assessed value is what tax rates are applied to.

Property is categorized into one of four classes, which determines the maximum tax rate that can be levied:

• Class I is for certain intangible personal property.
• Class II includes all property owned, used, and occupied by the owner exclusively for residential purposes, as well as all farms.
• Class III covers all other property situated outside of a municipality.
• Class IV is for all other property located inside a municipality.

A major form of tax relief for residents is the Homestead Exemption. This program exempts the first $20,000 of the assessed value of an owner-occupied residence from property taxes for homeowners who are at least 65 years old or who are permanently and totally disabled. To receive this benefit, eligible homeowners must apply with their local county assessor’s office.

Key Business Taxes

Businesses operating in West Virginia are subject to several specific taxes, with the Corporate Net Income Tax being one of the most prominent. This tax is levied on the profits of C-corporations. The tax rate is a flat 6.5% and is calculated based on the corporation’s federal taxable income, with certain adjustments and modifications as specified by West Virginia law.

Another significant business tax is the Severance Tax. This tax is imposed on the privilege of extracting or producing natural resources. It primarily affects industries engaged in mining coal, drilling for oil and natural gas, and harvesting timber. The rates vary depending on the specific resource being extracted.

Employers in the state are required to withhold state income tax from the wages of their employees who are residents of West Virginia or who perform work within the state. These withheld funds must be remitted to the State Tax Department on a regular basis.

How to File and Pay State Taxes

Taxpayers have multiple options for filing their individual income tax returns with the West Virginia State Tax Department. The most common method is electronic filing, which can be done through the state’s official online portal, “MyTaxes,” or by using approved third-party tax preparation software. Electronic filing generally leads to faster processing and quicker refunds. Alternatively, taxpayers can choose to mail a traditional paper return to the address specified by the tax department.

The deadline for filing individual income tax returns and paying any tax due is April 15, aligning with the federal tax deadline. If this date falls on a weekend or holiday, the deadline is moved to the next business day.

Payments can be made through several methods. Electronic funds transfer (EFT) is available through the MyTaxes portal. The state also accepts credit and debit card payments through its official payment vendor, though a processing fee may apply. For those who prefer to pay by mail, a check or money order can be sent with a payment voucher, Form WV-100V. The MyTaxes portal is also used for the filing and payment of other taxes, such as business sales tax.