CHARLESTON, W.Va. - The state Tax Department says it is not looking to make money off municipal sales taxes but simply wants to cover costs through a recently expanded processing fee, a department spokesman said Friday.
"We desire to work with the cities to create a system that's as fair to both parties as possible," Tax Department spokesman Danny Forinash said. "We want to see these municipalities benefit from this and we want to help them do that as much as possible."
Last week, the Legislature passed a bill allowing the Tax Department to collect up to 5 percent of local sales, use and excise taxes collected through the recently expanded municipal home rule pilot project.
Currently, the Tax Department keeps a little more than 1 percent of local taxes collected through the home rule program to cover its processing costs.
For example, in the first quarter of 2013, the department retained $17,776 of the $1,759,790 in sales tax revenue collected by the city of Huntington.
Forinash said that amount didn't fully cover the total processing costs the department incurred in handling that revenue.
"We've seen that a 1 percent ceiling is not going to be enough to cover the administrative costs for the Tax Department," he said.
Though he noted officials aren't planning on retaining the full 5 percent at this time. They will just retain what's needed.
He said with several cities around the state, including South Charleston, looking to sign up in the home rule program, department officials are still unsure exactly how much new cost they will need to take on.
"The Tax Department isn't looking to make money," Forinash said.
"If it's a lower percentage that's needed to implement that cost, it's just going to be what's needed."
Whenever a city implements a new tax under the program, officials at the Tax Department have to go through several steps to implement the tax.