Tax Problems in West Virginia? Options and Consequences

The West Virginia Tax Division administers and collects individual and business taxes in the Mountain State. Like all other states, West Virginia has unique rules, requirements, and collection procedures, and if you're dealing with a tax problem in this state, you need a professional experienced with WV taxes. 

TaxCure makes it easy to find pros – start your search now, and then narrow down the results to find licensed tax professionals with the exact experience you need.

Key takeaways

• West Virginia taxes – individual and corporate income tax, sales tax, and fuel/cigarette excise tax
• How to file – file and pay business taxes online. File and pay individual taxes through the mail or online.
• What if you don't pay? The state will add penalties and interest to your account. They may also file tax liens and use wage garnishments or bank levies to collect the tax.
• Payment options – contact the Tax Division about monthly payment plans or tax settlements.
• Get help with WV tax problems – use TaxCure to search for a licensed tax professional.

West Virginia state taxes

Individuals in West Virginia must pay state income tax, with rates ranging from 2.36% to 5.12%. There's also a state sales tax of 6%, plus local taxes with an average rate of 6.57%. The state's average property tax rate is 0.55%. 

Businesses may need to deal with the following taxes in West Virginia:

• 6.5% corporate income tax – applied to domestic and foreign corporations earning income in the state.
• Withholding tax – state income tax withheld from employee pay
• Sales tax – paid by consumers but collected and remitted by businesses.
• Use tax – due when businesses buy items that should be subject to sales tax, without paying it.

Additionally, there are gas and cigarette excise taxes at 35.7 cents per gallon and $1.20 per pack, respectively. 

Does West Virginia have a franchise tax?

No, West Virginia used to have a franchise tax, but it was repealed in 2014. Now, the state only has a corporate income tax.

Options if you fall behind on state tax payments

If you cannot afford to pay your state taxes in full, the West Virginia Tax Division may be willing to work with you through one of the following programs. For additional options, contact the Division directly or reach out to a tax professional. 

Payment plans on back taxes

If you get behind on your individual income tax payments, you can request a payment plan online if you can pay off the balance within six months. For longer payment terms, you must contact the Division directly. 

The state will file a tax lien against you unless:

• You can pay off the balance within six months.
• You can pay off the balance within 12 months, and you set up direct debit payments.

Businesses may be able to get payment plans on a case-by-case basis. To learn about options, contact a tax professional or reach out to the Division directly.

Offer in compromise to settle for less than owed.

The Division may settle individual income taxes for less than owed in these two situations:

• You can't afford to pay the tax – aka doubt as to collectibility.
• There is a legitimate doubt that you owe the tax, aka doubt as to liability.

If you believe you don't owe the liability, contact a WV tax professional or work directly with the Division. This type of settlement generally requires advanced knowledge of the tax code to secure, but in rare cases, it may be straightforward. For example, this option may come into play if a state auditor adjusts your tax return and you prove that the assessment was incorrect.

To apply based on doubt as to collectibility, file Form CD-3 or apply on MyTaxes. You must submit a detailed financial disclosure using WV Form 433-A. Note that this is not the same as the IRS form with the same name, but it collects similar information.

Does West Virginia offer settlements on business taxes?

Contact the Division directly to learn about settlement options for business taxes. The WV Tax website only talks about settlements for individuals.

What if you don't pay taxes in West Virginia?

If you fail to file or pay your WV taxes, the state may impose the following penalties against you:

• 5%, up to 25% failure to file taxes – for instance, if you don't file and you owe $10,000, the penalty is $500 per month and can get up to $2500. The penalty is backdated to the original due date once you file or after the Division assesses tax against you. 
• .5%, up to 25% failure to pay taxes – for instance, if you owe $10,000, the penalty is $50 per month and can get up to $2500.
• 5%, up to 25% failure to pay due to intentional disregard or negligence – for instance, if you owe $20,000 and intentionally avoid payment, the penalty is $1000 per month, up to $5000.
• 50% filing a false or fraudulent return – for example, if you file a false return showing that you owe nothing, but an audit discovers that you owe $50,000, the penalty will be $25,000.

The late filing and payment penalties stack on top of each other – they can get up to 50% of your balance, but they never exceed 5% per month. The WV Tax Division also assesses interest on unpaid balances at a variable rate – as of 2025, it's 12.25% annually. 

Can you get penalties waived in West Virginia?

The Division may waive late filing and late payment penalties if you incurred them due to reasonable cause – for example, natural disasters or other events out of your control. However, the state will not waive penalties for negligence, intentional disregard, or fraud.

Involuntary collections

If you don't set up payments or make other arrangements on your state tax debt, the Division of Tax may attempt to collect tax debt involuntarily. They may file a tax lien, which attaches to all of your assets. They may also garnish wages or seize bank accounts. In rare cases, the state may seize physical assets to recoup unpaid taxes.

How to sell or transfer assets with state tax liens attached

Selling or transferring an asset with a state tax lien against it can be difficult, but it's not impossible. If the proceeds from the sale are enough to pay off the entire lien, you can simply send the proceeds to the Tax Division, and they'll release the lien. If you're dealing with real estate, the closing company will handle this part of the process. 

If the sale proceeds aren't enough to pay off the full lien, you'll need to request a discharge from the state. A discharge is when the Tax Division agrees to remove the lien from a single asset, but they'll still require any proceeds from the sale that don't go to other lien holders. For example, if you sell a vehicle for $20,000 and pay $15,000 to your car loan, you'll need to send the remaining $5000 to the state, and then, they'll discharge the lien from the vehicle so that the title can transfer to the new owner. You generally need to apply for the discharge before going through with the sale. 

How to borrow money against an asset that has a tax lien attached

Typically, the only way you can use your assets as collateral for loans at this time is to get West Virginia to put its lien at a lower priority than the lender's. For example, if you want to take out a loan against your home to pay off your taxes, WV Tax must subordinate its lien so that the mortgage lender's lien can take priority.

How to avoid wage garnishment or bank levies

The best way to avoid these collection actions is to set up a payment plan or apply for an offer in compromise on your state taxes. You need to be proactive – otherwise, once the Division starts garnishing your wages or freezes the funds in your bank account, the only way to reverse those actions is to prove error or establish severe financial hardship. An experienced tax professional may be able to help you come up with additional options.

What if you don't pay your business taxes?

If you don't pay business taxes, the Division will add interest and penalties to your account. They may also take away your certificate and terminate your ability to run a business in West Virginia.

The Tax Division may take involuntary collection actions against either businesses or individuals. If you don't pay business taxes, the State can file a lien and seize business bank accounts or other assets. If your business is a sole proprietorship or general partnership, the State can also come after your personal assets for unpaid business taxes. 

Regardless of your business structure, West Virginia can hold business owners personally liable for unpaid sales tax. Then, they can go after your personal assets as well as your business assets.

How to contact the West Virginia Division of Tax

The easiest way to interact with the Division is through their online portal: MyTaxes. You can pay and file most individual and business taxes online. You can also request payment plans and offers in compromise. To talk to someone directly, use the following.

• Main office: (304) 558-3333 or (800) 982-8297 (Toll-Free).
• Email: [email protected] (use caution with sensitive info).
• Regional Offices: 
  • Beckley (304-256-6764)
  • Charleston (304-558-3333)
  • Clarksburg (304-627-2109)
  • Martinsburg (304-267-0022)
  • Parkersburg (304-420-4570)
  • Wheeling (304-238-1152)

FAQs about West Virginia Taxes

Does the West Virginia Division of Tax audit returns?

Yes, the Division may audit any returns that you file with the state. In particular, businesses should be aware of sales tax audits. If you're selected for an audit, you'll need to back up the information reported on your tax return.

Does West Virginia have a sales tax holiday?

Yes, every year, West Virginia offers a sales tax holiday, where clothing under $125, laptops/tablets under $500, school supplies under $50, school instruction materials under $20, and sports equipment under $150 are not subject to tax. The holiday starts the Friday before the first Sunday of August and runs through the end of that Monday – for example, in 2025, it was Friday, August 1, to Monda,y August 4, 2025.

Do remote sellers need to collect West Virginia sales tax?

Yes, remote sellers who sell taxable goods or services for delivery in West Virginia must collect and remit sales tax, unless they qualify for a small business exception. Once you have over $100,000 or over 200 sales in the state, you're no longer considered a small seller and must register for a sales tax account.

Do marketplace facilitators have to file sales tax returns in West Virginia?

Yes, if a marketplace facilitator doesn't qualify for the small business exception, they must collect and remit sales tax. However, if they're already registered as a remote seller, they don't need to set up an additional sales tax account. Additionally, if they do business in multiple states, they can register through the Streamlined Sales Tax Registration System (SSTRS) rather than directly with the WV Tax Division.

How to get help with West Virginia tax problems

Dealing with unfiled returns? State tax debt? Audits? Or simply have a question about your individual or business tax obligations in this state? Then, use TaxCure to find a tax professional who has experience with the tax laws in this state. 

Don't wait – find help and get the relief you need today. If you're also experiencing IRS tax problems, use the filters to narrow down the results so that you find a tax pro who can help you.