CHARLESTON, W.Va. – The Tax Foundation is reporting that West Virginia’s overall business tax structure is showing signs of improving fairness, but some unique taxes are making it difficult for manufacturers to compete.

“Here’s the good news: West Virginia’s tax structure ranks above average in our latest edition of the State Business Tax Climate Index, to the credit of bipartisan efforts of tax reform over several successive gubernatorial administrations,” Jared Walczak, director of state policy at the Tax Foundation, said in a Nov. 1 blog post. “And here’s the bad news: several sectors of the economy have been left behind by these reforms, subject to outmoded and uncompetitive taxes that make it hard for them to invest and grow in the Mountain State. That is particularly true of the manufacturing sector, due to the state’s taxation of machinery, equipment, and inventory, and, at the local level, an antiquated tax on business gross receipts that can hit manufacturers and distributors particularly heavily.”

West Virginia Manufacturers Association President Rebecca McPhail said the Tax Foundation’s latest analysis of taxes on manufacturing validate long-voiced concerns from WVMA members. But she said state government leaders have acknowledged the problem and are working to find a solution

“The Tax Foundation is reporting something that we in the manufacturing industry long have known – West Virginia’s tax structure unfairly punishes manufacturers with a tax that the vast majority of other states do not assess,” McPhail said. “Our tax on inventory, machinery and equipment is a continual impediment to business retention, growth and development. But we are optimistic that this appears to be a priority of our state leaders. The WVMA looks forward to working together with stakeholders to develop a fiscally responsible path forward that addresses this long-standing challenge.”

For more information, contact Rebecca McPhail at (304) 342-2123.