JULY 1 FOOD TAX REDUCTION MARKS 1/3 CUTFROM PREVIOUS 6 PERCENT TAX

Tax will be half of original by July 2008

Gov. Joe Manchin said the reduction of the food sales tax to 4 percent effective July 1 is part of his and the Legislature’s continuing effort to ease the tax burden on West Virginians. This is the second food tax reduction since Manchin took office and it marks a cut of 1/3 off the original 6 percent tax.

“Since taking office, we have reduced the sales tax on food 33 percent – a tax break of $50 million for all West Virginians – and it will be half of its original amount by July 2008,” Manchin said. “We will continue to evaluate our tax structure as our economy grows and look for ways to cut taxes fairly and responsibly.”

The governor said the gradual step down of the sales tax is fiscally responsible and won’t place hardship on the state’s revenue or cash flow. “This will benefit our residents and will allow our businesses to enjoy a more level playing field with those in neighboring states.”

The sales tax on food and food ingredients for human consumption will be reduced from 5 percent to 4 percent July 1. Prepared food, along with food sold through vending machines and soft drinks will be taxed at 6 percent.

During the 2005 special session of the Legislature, both the House and Senate, with the support of the governor, passed legislation to reduce the state sales tax on food. The food tax previously dropped from 6 percent to 5 percent Jan. 1, 2006.

Tax Commissioner Virgil Helton said the State Tax Department has been working with grocers and retailers to ensure the correct rates are applied.

Information about the sales tax on food may be found in Publication TSD 419 on the Tax Department Web site, www.state.wv.us/taxdiv or by calling 1-800-982-8297.