Proposed removal of state income tax includes 431% tax increase for local breweries

PRINCETON, WV (WOAY) – Governor Justice’s new proposal to eliminate state income tax comes with a variety of small tax increases across the board.

Cigarettes and wine are two commodities to see tax increases, and there will be an increase to the sales tax from 6% to 7.9%.

However, one industry affected more than any other is the local craft beer industry. They pay a tax on every barrel of product sold to distributors, and will see a 431% increase in that tax if the bill passes.

Matt Barnett is the owner of the Sophisticated Hound, a brewing company in Princeton. He says the tax would hurt the industry immensely. 

“If you eliminate one tax, you have to get this money from somewhere,” Barnett said. “Instead of spreading that across the board, what he wants to do is get it all back from one industry: The West Virginia craft beer industry.”

The proposed increase would raise the current rate of $5.50 of tax paid per barrel sold, all the way to $29.25. For comparison, surrounding states have rates much lower than the current $5.50. Kentucky pays only $2.50 per barrel, Pennsylvania pays $2.60 and Maryland pays $2.79.

Local brewing companies believe the tax increase would cause prices to rise, ultimately hurting the consumer.

“It starts with the tax on the industry, but it ultimately goes to the consumer.”

There are less than three-dozen local brewers in West Virginia, and it’s estimated this 431% tax increase would bring in roughly $26M, designed to partially offset the cost of losing the income tax. 

“I’ve lived here for 43 years, I love this state. But the Governor pushes by local, support local, and then he does this to this small industry. What’s that say to us?”

Some local brewers against the current form of the bill have partnered and are trying to find representation in Charleston before the bill is voted on.

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