West Virginia House Bill HB3246

West Virginia 2023 Regular Session

• Introduced: 2/3/23
• Refer: 2/3/23

Caption

Repeal the additional one and one-half percent interest rate for underpayments

Impact

If enacted, HB3246 would affect taxpayers in West Virginia by reducing the financial burden associated with underpayment penalties. The bill proposes to standardize the interest rate applied to late tax payments without the additional percentage, which could potentially lead to lower overall costs for taxpayers who find themselves in a position of underpayment. The effective date for this change is set for after December 31, 2023, allowing time for taxpayers and the Tax Commissioner’s office to adjust to the new regulations.

Summary

House Bill 3246 seeks to amend the West Virginia Tax Procedure and Administration Act by repealing the additional one and one-half percent interest rate that is currently applied to tax underpayments. This change is directed toward simplifying the tax administration process and ensuring that taxpayers are subject only to the base interest rate of eight percent per annum on overdue taxes. By eliminating the extra charge for underpayments, the bill aims to provide some relief to taxpayers and encourage compliance with payment deadlines.

Sentiment

The sentiment surrounding HB3246 seems to be generally positive, particularly among taxpayer advocacy groups and individuals who may have previously faced higher financial liabilities due to compounded interest on tax underpayments. Proponents view this bill as a fair adjustment aimed at reducing punitive measures against taxpayers. However, some concerns may be raised by those advocating for thorough tax compliance oversight, fearing that this could lead to increased instances of underpayment as the financial penalties lessen.

Contention

While there seems to be broad support for the repeal of the higher interest rate for underpayments, there could be significant contention regarding the implications for state revenue. Opponents may argue that lowering the penalties could diminish the incentive for timely tax payments, leading to increased underpayment situations in the future. The debate hinges on the balance between providing taxpayer relief and maintaining robust tax compliance mechanisms.