Financial News (Photo Illustration/MetroCreative)

CHARLESTON – Although tax collections were slightly below expectations, West Virginia Department of Revenue Deputy Secretary Mark Muchow told lawmakers Monday that the state is still expected to end the fiscal year with a positive result in tax revenues. On Monday afternoon, Muchow presented members of the Joint Standing Finance Committee with a report on fiscal 2025 tax collections for the first four months of fiscal 2025, starting in July. October tax collections of $393.6 million were 3.67% below the $408.6 million tax revenue estimate set by the state Department of Revenue, according to the monthly tax revenue report released by the State Senate Finance Committee earlier this month. Revenues for the month came in $15 million less than expected, but October tax revenues came in almost 1% better than the $390.8 million collected in October 2023. Year-to-date tax collections for the first four months of fiscal year 2025 began in 2025. July amounted to $1.70 billion; this was just 0.081% below the $1.71 billion revenue estimate, or $13.8 million below estimates. Despite these reports, tax collections for the end of fiscal 2025 and the end of June 2025 are still on track to exceed estimates, Muchow said.
“Overall, we’re on track this year in terms of our overall revenue, even though we’re down a bit.” Muchow said. “The numbers are just about on target overall.”
Personal income tax collections of $168.5 million for October were 8.86% below the $184.9 million estimate. Year-to-date personal income tax collections of $701.9 million are 4.55% below estimates of $735.4 million.
“The difference you see in personal income tax figures for October this year compared to last year has nothing to do with income tax deductions. “These were completely in place.” Muchow said. “This is related to the fact that last year we had extra SALT money in the first half of the fiscal year that wasn’t there this year.”
SALT stands for the State and Local Tax credit program. Senate Bill 151, passed in 2023, made changes to the way pass-through entities and partnerships pay personal income taxes. The peak of personal income tax collections was April 2023, when the state collected $2.736 billion, according to Muchow. April 2023 was the first month that the Tax Office implemented new tax tables following the adoption of the 2023 tax reform package, which reduced personal income tax rates by 21.25%. As of October, personal income tax collections were $2.174 billion.
“The main reason why it was lower than last year was because we raised a lot of one-time money related to the SALT program in the first half of the year last year. “These are not in this year’s collections,” he said. Muchow said. “The good thing about this is that we will be paying out the massive SALT repayments around February of this fiscal year.”
The quarterly distribution of severance tax revenues collected from coal and natural gas production to districts and municipalities contributed to severance tax collections not meeting forecasts. October severance tax collections were in the red at $5.7 million, versus forecasts expecting collections of $9.8 million. Year-to-date severance tax collections of $68.5 million were 22% below revenue estimates of $87.8 million.
“The severance tax certainly performed better than last year in terms of being less negative, but severance tax collections were a bit of a mess in October.” Muchow said. “So there is some volatility in the monthly numbers, but we are on track with what we envision in the monthly personal income tax and its response to the tax cuts.”
Lawmakers are closely monitoring current fiscal year tax collections as they prepare to help craft the fiscal year 2026 general revenue budget with Governor-Elect Patrick Morrisey during next year’s 2025 legislative session.
Steven Allen Adams can be reached at [email protected].