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Potential hike on barrel tax could close doors in West Virginia

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BLUEFIELD, W. Va. (WVVA) - Gov. Jim Justice is continuing to push his proposal to eliminate West Virginia's personal income tax.

House of Delegates Minority Leader, Doug Skaff (D), told WVVA that the bill to repeal that tax needs a lot more review, as it was only introduced to the legislature 25 or 26 days into the current session.

One industry is already speaking out about the hardships it will face, should the bill pass.

The current proposal would increase the barrel tax from $5.50 to $29.25, more than a 400% increase, hitting local breweries hard.

"That's a big impact when you just come out of the pandemic," Lawrence Walkup, Old Spruce Brewing Owner, said. "They're struggling to keep numbers, struggling to pay bills."

"I think for the Governor to try and balance the budget on the backs of the breweries of West Virginia is short-sided and backwards," Jamie Lester, Freefolk Brewing Co-Owner, said.

"A tax like this would cripple the industry," Matt Barnett, Sophisticated Hound Owner, said. "It would cripple West Virginia breweries."

...Some said it could do even more than cripple, it could kill.

"Our profits are marginal. We're beginning our third year now," Lester said. "We haven't really made any money, we're just on the edge. A tax like this would probably put us under."

"There is concern everyday," Barnett said. "Breweries that have a tap room... we have it to supplement that tax. If you sell 300 barrels out the back door, but you only do so much on the taproom, that's not going to cover your cost."

So, WVVA asked Gov. Justice his reasoning...

"Think about this just a second... that's seven cents a can on beer," Gov. Justice, said. "Seven cents. That's all we're talking about here. We're not talking about a 400 and some odd percent increase and everything. We're talking about seven cents. There is going to be $1,087,000,000.00 that's going back into the hands of our people. If those breweries want more and more people to come, and more and more business and everything, and they miss this... shame on them."

But it's not just the breweries that will pay the price, it'll put a dent in the consumer's pocket.

"You're going to see Virginia product next to West Virginia product, and it's going to be significantly more to buy a local product, to buy West Virginia beer in West Virginia," Alexander Durand, Greenbrier Valley Brewing Sales & Marketing Director, said.

But for these local breweries, they said it's about so much more than beer, it's about culture.

"That's why we named our brewery the Freefolk Brewery, because Mountaineers are always free," Lester said. "It's based on our state motto."

"Yeah, it's great beer, but I want them to have a story," Durand said. "To know a little bit more about West Virginia... the main thing is changing the dialogue, how West Virginia is represented and viewed out of the state."

The minority leader in the West Virginia House of Delegates echoes brewery owners concerns about the cost of eliminating the income tax in West Virginia. Del. Doug Skaff (D) said it's not just breweries who will pay the price.

"He's affected our coal companies, our natural gas companies, those who want to buy items over $5,000," Skaff said. "He's affected our restaurants, our breweries, our small businesses, our professionals. I mean, this is one bill that definitely unifies the state, but I haven't seen much support at all, from anybody."

Now, the Governor's proposal has to make it to cross-over day, which is two weeks before the end of the session. All bills that don't make the cross over must wait for the next session or be taken up in a special session.

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Hannah Howard

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