CHARLESTON — Despite tax collections being slightly below expectations, West Virginia Department of Revenue Deputy Secretary Mark Muchow told lawmakers Monday the state is still expected to end the fiscal year in the positive for tax revenue.

Muchow provided a report Monday afternoon on fiscal year 2025 tax collections for the first four months of fiscal year 2025 beginning in July to members of the Joint Standing Committee on Finance.

According to the monthly tax revenue report released earlier this month by the state Senate Finance Committee, October tax collections of $393.6 million came in 3.67% below the $408.6 million tax revenue estimate set by the state Department of Revenue. Revenues for the month came in $15 million less than expected, though October tax revenues came in nearly 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 that began in July came in at $1.70 billion, which was only .081% below the $1.71 billion revenue estimate, or $13.8 million below estimates. Muchow said despite these reports, tax collections for the end of fiscal year 2025 at the end of June 2025 are still on a path to exceed estimates.

“Overall, we’re on track this year for our general revenue even though we’re down a little bit,” Muchow said. “The numbers are pretty much on target overall.”

Personal income tax collections for October of $168.5 million were 8.86% below the $184.9 million estimate. Fiscal year-to-date personal income tax collections of $701.9 million were 4.55% below estimates of $735.4 million.

“The difference that you’re seeing this year in personal income tax numbers for October compared to last year is not related to the income tax cuts. Those were fully in place,” Muchow said. “This relates to the fact that we had extra SALT money last year in the first half of the fiscal year that’s not there this year.”

SALT refers to the State And Local Tax deduction program. Senate Bill 151, passed in 2023, made changes to how pass-through entities and partnerships pay personal income taxes.

According to Muchow, the peak of personal income tax collections was April 2023, when the state had collected $2.736 billion. April 2023 was the first month the Tax Division put in place the new tax tables after the passage of the 2023 tax reform package that cut personal income tax rates by 21.25%. As of October, personal income tax collections were $2.174 billion.

“The main reason it was down from last year was because last year in the first half of the year…we collected a lot of one-time monies related to the SALT program. Those are not in this year’s collections,” Muchow said. “The good part about that is we’ll pay out on those huge SALT refunds around February of this fiscal year.”

Quarterly distributions to counties and municipalities of severance tax monies collected from coal and natural gas production helped contribute to severance tax collections not meeting estimates. October severance tax collections were in the red by $5.7 million when estimates expected $9.8 million in collections. Fiscal year-to-date severance tax collections of $68.5 million were 22% below the $87.8 million revenue estimate.

“The severance tax definitely did better than last year in terms of being less negative, but severance tax collections were a little disjointed in the month of October,” Muchow said. “So, we have a little bit of volatility in the monthly numbers, but we are on track for what we forecasted in the monthly personal income tax and its reaction to the tax cuts.”

Lawmakers are watching current fiscal year tax collections closely 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.