The Register-Herald, Beckley, West Virginia

Local News

February 20, 2010

INVENTORY TAX

Manchin says measure is being progressive

Gov. Joe Manchin insists his proposal to accord businesses a tax break on new equipment is an effort to eliminate the worst barrier to attracting new firms and cannot hurt counties since they could exercise the option of striking it from their tax rolls.

Nor, Manchin says, can the proposal be viewed as one that would create an uneven playing field among counties.

“If you want to be competitive in the market price, you better be competitive, and we have not been in this category,” Manchin told The Register-Herald editorial board Friday via telephone conference call.

“We’re one of the few states that still charge, a penalty if you will, on your inventory, your personal property. If you buy something new, we beat the living daylights out of you.”

Manchin said his proposed constitutional amendment, already approved by the House, is in line with last year’s efforts to reform the tax structure for the business community when changes were made in the franchise and corporate net income taxes.

Every group associated with business considers the inventory tax “the biggest impediment” to attracting and retaining businesses, the governor said.

“This is for small business,” he said.

Counties steeped in natural resources extraction would be unwise to extend the break to such firms, he suggested.

“It’s only going to basically technology,” he said.

“Any high-tech company or small business startup that wants a $1 million or $500,000 piece of equipment would not go on the books. They’re not giving up anything. They’re not giving away their base. They’re trying to basically attract and diversify their economy. That’s really the intent of what we’re trying to do.”

Manchin said he wanted to dispel a flood of “misunderstandings and maybe even some untruths” that have accompanied debate on the resolution that would put the question on the ballot next fall as a constitutional amendment.

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