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HB 2104

Limiting the imposition of municipal business and occupation taxes

2025 Regular Session Introduced by Gary Howell and 1 co-sponsor

House Bill 2104 limits municipalities in West Virginia from imposing new business taxes, ensuring a stable tax environment that benefits businesses and taxpayers.

To House Finance
#municipalities #taxation
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Bill Summary · HB 2104

Summary of House Bill 2104: Limiting the Imposition of Municipal Business and Occupation Taxes

Bill Information:
- Bill Number: HB 2104
- Title: Limiting the imposition of municipal business and occupation taxes
- Status: To House Finance
- Introduced: January 29, 2025
- Classification: Bill
- Subject: Municipalities, Taxation

Purpose and Intent

House Bill 2104 aims to regulate the imposition of municipal business and occupation taxes in the state of West Virginia. The primary intent of the bill is to limit the ability of municipalities to impose new taxes or increase existing tax rates on specific business activities, thereby providing a more predictable tax environment for businesses operating within municipal boundaries.

Key Provisions

  1. Limitation on Tax Imposition:

    • Municipalities are prohibited from computing, imposing, or collecting a business and occupation tax in any tax year after 2023 on any category of business activity for which they were not already imposing taxes in or before the tax year 2024.

  2. Maximum Tax Rates:

    • The bill establishes that municipal business and occupation taxes cannot exceed the maximum rates imposed by the state on similar business activities. Specific caps are set for various activities, including:
      • A maximum of 0.1% for aircraft repair and related services.
      • A maximum of 0.5% for health maintenance organizations on specific income sources.

  3. Effective Dates:

    • Taxes levied under this bill can become effective at the start of the current fiscal year or any date thereafter, but any new tax or rate increase will only apply to gross income from contracts entered into after the effective date.

  4. Exemptions:

    • The bill outlines exemptions for certain activities that were previously exempt from state business and occupation taxes, particularly for religious or charitable organizations, under specific conditions.

  5. Reduction of Taxes on New Automobiles:

    • A phased reduction of municipal business and occupation taxes on the sale of new automobiles is established, with a 50% reduction starting July 1, 2023, and complete elimination by July 1, 2025.

Impact

  • Businesses: The bill is designed to provide relief to businesses by preventing municipalities from imposing new taxes or increasing existing ones unexpectedly. This is particularly beneficial for businesses that may be considering expansion or investment in West Virginia.

  • Municipalities: Local governments will have limited authority to generate revenue through business and occupation taxes, which may impact their budgets and funding for local services.

  • Taxpayers: The bill aims to create a more stable tax environment, potentially leading to lower overall tax burdens for businesses and consumers in the long term.

Procedural Timeline

  • January 29, 2025: Bill filed by Rep. Tony M. McCombie.
  • February 4, 2025: First reading and referred to the Rules Committee.
  • February 12, 2025: Introduced in the House and referred to the Finance Committee.
  • March 12, 2025: Passed out of the Executive Committee with a Do Pass recommendation.
  • March 27, 2025: Held on the calendar for second reading.
  • May 31, 2025: Rule 19(a) re-referred to the Rules Committee.

This summary provides an overview of House Bill 2104, highlighting its purpose, key provisions, potential impacts, and procedural history. The bill represents a significant change in how municipalities can impose business taxes, aiming to foster a more business-friendly environment in West Virginia.

Compiled from official sources — confirm details with the bill’s official record.

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