WEST VIRGINIA'S TAX PICTURE ON THE HIGH SIDE

(04/07/2006)
Despite WV ranking near the bottom in median and per capita income in the US, the state ranks 16th in per capita in tax collections, rising from 19th in 2004.

The U.S. Census Bureau shows West Virginians paid about $300 more in state taxes per capita in 2005 than they did in 2004, more than residents in 34 other states.

The average West Virginian paid $2,367 last year in various state taxes, from income and vehicle tax to taxes on gas, food and tobacco products.

Overall, WVs tax revenue was up about 14 percent from 2004.

State officials said the increase is due mostly to huge growth in the energy market and a rise in corporate income taxes.

Gov. Joe Manchin's office said the Census Bureau's ranking doesn't adequately reflect West Virginia's tax environment compared to other states.

Mark Muchow, fiscal policy director for the state Department of Revenue, said most of West Virginia's tax load is administered on the state level, residents pay less in local taxes than people elsewhere in the country.

Fees like county property taxes and city user fees, were not included in the survey.

"If you add in local taxes with state taxes, we rank somewhere around 40th in the nation," Muchow said, making the state look much better related to the tax burden.

The census report shows that on the state level, tax collections jumped to $4.3 billion last year from $3.7 billion the year before.

The biggest increases in revenue came in the form of corporate net income taxes.

People saw their average charge there jump to $255 this year from $100 last year, again mostly due to soaring prices and profits in the energy market.

The average individual's state income tax rose to $645 from $589 the year before.

The total state taxes West Virginians pay are nearly double what people in the lowest-ranking South Dakota pay to keep their state government afloat.

Texas, New Hampshire, Colorado and Missouri also had among the lowest annual per capita state tax collections, ranging from $1,434 to $1,646.

Topping the list with the highest state taxes was Vermont, where the per capita annual collection was about $3,600, followed by Hawaii, Wyoming, Connecticut and Delaware.

Every state except New Hampshire saw per capita tax collections rise.

"The most interesting aspect of the data is when you look at the state of Alaska," Muchow said. "Alaska had revenue growth of 38 percent, and Alaska doesn't even impose personal income tax. That was almost entirely related to increases in energy prices."