November Tax Collections in West Virginia Keep Revenues on Target for Fiscal Year

CHARLESTON — Tax collections in West Virginia are tracking close to revenue estimates for the first five months of fiscal year 2025 thanks to better collections in November.

According to a monthly report released Monday by the state Senate Finance Committee, tax collections for the general revenue fund fiscal year-to-date came in at $2.101 billion, which was 0.24% more than the $2.096 billion estimate from the Department of Revenue. November tax collections of $400.5 million were 4.9% above the $381.6 million revenue estimate, providing the state with $18.8 million in surplus collections for the month.

“We are watching West Virginia continue to grow, and we are excited about the future,” Gov. Jim Justice said in a statement Monday. “We’ve cut over a billion dollars in taxes. That’s not just for one year. That’s forever. Even with these tax cuts, West Virginia continues to perform well and succeed.”

Tax revenues for July through November provided West Virginia more than $5 million in surplus tax collections. But fiscal year-to-date tax collections were 5.1% below tax collections for the same five-month time period in fiscal year 2024, or $112.6 million below collections for the previous fiscal year.

Three out of the state’s four major sources of tax revenue came in above estimates for the month, helping to keep tax collections close to official estimates in November.

However, some of those collections remain below estimates for the first five months of fiscal year 2025.

November personal income tax collections of $151.6 million was 5.8% above the $143.3 million estimate, providing the state with $8.3 million in surplus collections. Fiscal year-to-date personal income tax collections of $853.5 million was 2.9% below the $878.7 million estimate, or $25.2 million below estimates. July-November tax collections were also 9% below collections for the same time period last fiscal year, or $84 million below collections for the previous year.

Consumer sales and use tax collections for November were $170.8 million, or 3.3% above the $165.4 million revenue estimate, providing the state a $5.4 million surplus for the month. Fiscal year-to-date sales tax collections of $719.8 million was .71% above the $714.8 million revenue estimate, giving the state more than a $5 million surplus.

November corporate net income tax collections of $15.6 million was more than the $4.6 million revenue estimate, providing the state a nearly $11 million surplus for the month. Fiscal year-to-date corporate net income tax collections of $123 million was 21.6% more than the $101.2 million revenue estimate for a $21.9 million surplus nearly halfway through the current fiscal year.

Tax collections for West Virginia’s severance tax on coal and natural gas continue to struggle, with collections for four out of the last five months coming in below estimates. November severance tax collections of $18.9 million was 29.1% below the $26.6 million revenue estimate, or $7.7 million below estimates. Fiscal year-to-date severance tax collections of $87.3 million was 23.7% below the $114.4 million, or $27.1 million below estimates.

State revenue officials and Gov. Jim Justice said last month that West Virginia is on track to end fiscal year 2025 at the end of June 2025 with approximately $80 million in surplus tax collections. That is a far cry from $826 million in surplus for fiscal year 2024 and $1.8 billion in surplus for fiscal year 2023.

“My term is almost over. We should certainly celebrate some of these big wins. But I would urge you to support our current and future leaders,” said Justice, who is finishing his second term as governor and preparing to take his U.S. Senate seat next month. He will be succeeded as governor by Attorney General Patrick Morrisey.

“Push us to keep making things better and better, Justice continued. “It was really tough digging ourselves out of the massive hole. But we’ve done it. We are producing surplus after surplus, and today is more proof of that. There’s no reason for us to slow down.”

Much of the reduction in tax collections comes from the 2023 tax reform package that cut personal income tax rates by 21.25% retroactive of January 2023, returning nearly $500 million to taxpayers and reducing personal income tax collections, which account for nearly 40% of general revenue fund collections.

The state will see additional personal income tax collections beginning in January 2025. After the end of fiscal year 2024, the Department of Revenue determined in August that the state would see a 4% personal income tax cut at the beginning of 2025, which will return $92 million to taxpayers when fully implemented.

Justice and the Legislature also agreed on an additional 2% personal income tax cut in a special session at the beginning of October, which will also go into effect in January 2025 and return $46 million to taxpayers when fully implemented.