Bills to exempt military pensions from state taxation and increase the tax credit for rehabilitation of historic structures were among the first introduced during a special session of the West Virginia Legislature that convened Monday.
Lawmakers on Monday also unanimously passed a third bill to help ensure that contractors on state road projects are compliant with state tax laws.
House Bill 101 — which would preclude military retirement income in West Virginia from personal income tax — had its first of three required readings in the House on Monday. A similar bill was introduced in the Senate and referred to that chamber’s finance committee.
John Nanny, commandant of the Marine Corps League Detachment 771 in Wheeling, said he remembers when veterans didn’t pay state tax on their military retirement income, and he welcomes the return of the exemption.
“I don’t have any reservations about them doing that,” he said. “That is fantastic. When the guys were away, they paid for it.”
Moundsville resident Fred Brunner served 22 years as a Marine, including four years in active military service. The remaining 18 years he spent in the National Guard, and he retired with the rank of master sergeant.
He believes most veterans receiving retirement benefits in West Virginia are in situations similar to his. They did not serve an extended amount of active time in the military, and they do not collect a large amount of retirement pay.
Brunner estimates the vast majority of veterans in the state receive less than $20,000 annually in military retirement benefits.
The amount of pay varies from veteran to veteran, and is based on their time served and the rank they achieved. Upon retirement, the veteran receives half the amount of the military pay each year they received while in active duty.
“Military pay should be exempt from taxes,” Brunner said. “First of all, it’s not nearly what people can make as far as retirement goes, and it should be exempt. Most of the retired military people in West Virginia are probably enlisted with 20-25 years of service.”
Legislation that would increase the amount of personal tax credit allowed for qualified rehabilitation expenditures on historic structures was read the first time Monday, and is set for a second reading today. HB 203 would increase the tax credit from 10 percent to 25 percent for expenditures made on or after Dec. 31. The bill also stipulates a five-year sunset period on the historic tax credit program.
The legislation sets a cap on the amount of tax credit at $10 million per individual project, and no more than $30 million in tax credits could be awarded in a single fiscal year. The tax credits would be awarded on a first-come, first-served basis, the bill states.
In addition, $5 million of the $30 million total must be reserved for smaller projects with proposed tax credits of $500,000 or less.
Another piece of legislation, SB 2002, passed both the Senate and House on Monday, but the House version contains minor amendments with which the Senate will be asked to concur.
That legislation would permit certain tax information regarding contractors on state road projects to be shared with designated West Virginia Division of Highways employees, with the intent of making sure contractors are up to date on tax withholding requirements.
The measure passed the Senate on a vote of 31-0, with Sen. Charles Clements, R-Wetzel, among the three senators absent. All local delegates were present for the 94-0 vote in the House.
Also getting a first reading in the Senate on Monday was SB 2003, establishing hiring policy for the DOH and the Department of Taxation following passage of the $1.6 million “Roads to Prosperity” referendum on Oct. 7.
SB 2003 seeks to expedite the hiring of needed employees, and “ensure a level playing field for in-state and out-of-state businesses,” the bill states.
Both the House and Senate will reconvene at noon today.