CHARLESTON, W.Va. -- In consecutive months, the alternative fuel vehicle tax credit has resulted in lost income tax collections to the state of $29 million in June, and $19 million in July.
So how much will the 2011 law -- effectively repealed April 14 -- cost the state in lost tax revenue?
According to Deputy Revenue Secretary Mark Muchow, "We're probably looking at close to $100 million."
Muchow said the tax break caught the department by surprise -- something that rarely happens -- because it started out as a minor provision in the 2011 Marcellus Gas and Manufacturers' Development Act to provide generous tax credits to car buyers, but for natural gas and propane-fueled vehicles only.
The tax impact was believed to be nominal, since there are so few natural gas-powered vehicles on the road. (Of the more than 6,500 vehicles to date that owners have claimed the tax credit, only 9 are natural gas-powered, Muchow said.)
However, the bill was amended in the final hours of the 2011 session to apply the credit to any hybrid or alternative fuel vehicle. With a write-off of 35 percent of the purchase price, up to $7,500 for passenger cars, and up to $25,000 for commercial vehicles, that created a rather significant dent in personal income tax collections -- to the point that Gov. Earl Ray Tomblin introduced legislation in the regular session (SB185) to scale the credit back to its original, limited focus.
The governor's bill originally intended to close the credit retroactively, to vehicle purchases prior to Dec. 31, 2012. However, the legislative process being what it is, that got changed in the final version of the bill to the effective date of the legislation, which was this April 14.
Unfortunately, from the state's perspective, publicity about the tax credit's pending repeal -- as well as a lot of car dealers urging prospective hybrid buyers to take advantage of the credit -- led to a surge in alternative vehicle sales.
"This credit has been running high since at least March," said Muchow, who said the tax write-offs peaked in June.
In many cases, he said, taxpayers filed amended returns to claim the credit, which they were not aware of prior to publicity about the repeal bill.
Of note, of the initial signees to the new WVU/IMG Mountaineer Sports radio network, it appears that all were MSN affiliates, and most (seven of 11) are also Metronews affiliates.
(Consistent with info that radio stations wanting to carry Mountaineer sports broadcasts were strongly encouraged to also become Metronews affiliates ...)
Still waiting to see if John Raese shallows his pride and allows the half-dozen or so West Virginia Radio Corp. owned and operated stations that carried MSN to sign on as IMG network affiliates ...