Last August, West Virginia Governor Earl Ray Tomblin signed S.B. 1001 into law. S.B. 1001 initiates a gradual phasing out of the sales tax on food with a stipulation that must be met prior to full removal of the sales tax on food.
On January 1, 2012, the first reduction brought the sales tax on food to two percent. Beginning July 1, 2012, the sales tax is supposed to reduce to one percent.
After June 30, 2013, the sales tax on food is scheduled to “cease…Provided, That [sic] the cessation of tax after June 30, 2013, authorized by this subsection shall be suspended if the balance of funds as of December 31, 2012, in the Revenue Shortfall Reserve Fund …does not equal or exceed twelve and one-half percent of the General Revenue Fund budgeted for the fiscal year commencing July 1, 2012.”
In laymans language, the Governor’s press release states it this way:
Senate Bill 1001 reduces the food tax to 2 percent on January 1, 2012 and then to 1 percent on July 1, 2012. The bill removes the tax if on December 31, 2012, the percentage of the general revenue budget in Rainy Day Fund A is at least 12.5 percent. In addition, Senate Bill 1001 increases the cap on mandatory surplus transfers to Rainy Day Fund A, from 10 percent to 13 percent of the general revenue budget.
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