H. B. 3162


(By Delegate Carmichael)
[Introduced February 21, 2003; referred to the
Committee on Health and Human Resources then Finance.]




A BILL to amend and reenact section three, article fifteen, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact sections three and four, article seventeen of said chapter, all relating to tax; increasing the rate of tax on cigarettes from seventeen cents to one dollar and seventeen cents; providing for the dedication of five million dollars of the revenue for the first year to the department of agriculture; and reducing the rate of tax on food for home consumption from six percent to three percent.

Be it enacted by the Legislature of West Virginia:
That section three, article fifteen, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that sections three and four, article seventeen of said chapter be amended and reenacted, all to read as follows:
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
§11-15-3. Amount of tax; allocation of tax and transfers.

(a) For the privilege of selling tangible personal property and of dispensing certain selected services defined in sections two and eight of this article, the vendor shall collect from the purchaser the tax as provided under this article, and shall pay the amount of tax to the tax commissioner in accordance with the provisions of this article.
(b) Beginning on the first day of March, one thousand nine hundred eighty-nine, the general consumer sales and service tax imposed by this article shall be is at the rate of six cents on the dollar of sales or services, excluding gasoline and special fuel sales, which remain taxable at the rate of five cents on the dollar of sales, and excluding food for home consumption which, beginning the first day of July, two thousand three, is taxable at the rate of three cents on the dollar of sales.
(c) There shall be is no tax on sales where the monetary consideration is five cents or less. The amount of the tax shall must be computed as follows:
(1) On each sale, where the monetary consideration is from six cents to sixteen cents, both inclusive, one cent.
(2) On each sale, where the monetary consideration is from seventeen cents to thirty-three cents, both inclusive, two cents.
(3) On each sale, where the monetary consideration is from thirty-four cents to fifty cents, both inclusive, three cents.
(4) On each sale, where the monetary consideration is from fifty-one cents to sixty-seven cents, both inclusive, four cents.
(5) On each sale, where the monetary consideration is from sixty-eight cents to eighty-four cents, both inclusive, five cents.
(6) On each sale, where the monetary consideration is from eighty-five cents to one dollar, both inclusive, six cents.
(7) If the sale price is in excess of one dollar, six cents on each whole dollar of sale price, and upon any fractional part of a dollar in excess of whole dollars as follows: One cent on the fractional part of the dollar if less than seventeen cents; two cents on the fractional part of the dollar if in excess of sixteen cents but less than thirty-four cents; three cents on the fractional part of the dollar if in excess of thirty-three cents but less than fifty-one cents; four cents on the fractional part of the dollar if in excess of fifty cents but less than sixty-eight cents; five cents on the fractional part of the dollar if in excess of sixty-seven cents but less than eighty-five cents; and six cents on the fractional part of the dollar if in excess of eighty-four cents. For example, the tax on sales from one dollar and one cent to one dollar and sixteen cents, both inclusive, seven cents; on sales from one dollar and seventeen cents to one dollar and thirty-three cents, both inclusive, eight cents; on sales from one dollar and thirty-four cents to one dollar and fifty cents, both inclusive, nine cents; on sales from one dollar and fifty-one cents to one dollar and sixty-seven cents, both inclusive, ten cents; on sales from one dollar and sixty-eight cents to one dollar and eighty-four cents, both inclusive, eleven cents and on sales from one dollar and eighty-five cents to two dollars, both inclusive, twelve cents.
(d) Separate sales, such as daily or weekly deliveries, shall may not be aggregated for the purpose of computation of the tax even though such the sales are aggregated in the billing or payment therefor. Notwithstanding any other provision, coin-operated amusement and vending machine sales shall may be aggregated for the purpose of computation of this tax.
(e) Of the taxes collected under the provisions of this article, one sixth of such taxes collected for the period subsequent to the thirty-first day of May one thousand nine hundred eighty-eight prior to the first day of July, one thousand nine hundred eighty-nine, and not attributable to or resulting from the repeal of section eleven of this article or attributable to tax on purchases of gasoline and special fuel, shall be reasonably allocated, with allowance for refunds and net of reasonable costs of administration, to and deposited by the tax commissioner in the special account created in the treasury by section eight-a, article four-b, chapter twenty-three of this code, not to exceed the amount sufficient for making timely repayment of the principal and interest under the first payment due, by the thirtieth day of June, one thousand nine hundred eighty-nine, in repayment for the moneys previously transferred from such pneumoconiosis fund.
ARTICLE 17. TOBACCO PRODUCTS EXCISE TAX ACT.
§11-17-3. Levy of tax; ratio; dedication of proceeds.
(a) Tax on cigarettes. -- For the purpose of providing revenue for the general revenue fund of the state, beginning the first day of July, two thousand three, an excise tax is hereby continued levied and imposed on sales of cigarettes at the rate of one dollar and seventeen cents on each twenty cigarettes or in like ratio on any part thereof. Only one sale of the same article shall may be used in computing the amount of tax due under this subsection: Provided, That the first five million dollars of the revenue in the first year from the increased tax beginning the first day of July, two thousand three, is dedicated and shall be transferred, without legislative appropriation, to the department of agriculture for crop transition programs.
(b) Tax on tobacco products other than cigarettes. -- Effective the first day of January, two thousand two, an excise tax is hereby levied and imposed on the sale or use of other than cigarettes tobacco products at a rate equal to seven percent of the wholesale price of each article or item of tobacco product other than cigarettes sold by the wholesaler or subjobber dealer, whether or not sold at wholesale, or if not sold, then at the same rate upon the use by the wholesaler or dealer. Only one sale of the same article shall be used in computing the amount of tax due under this subsection. Revenues received from this tax shall must be deposited into the general revenue fund.
§11-17-4. Effect of rate changes; tobacco products on hand or in inventory; report; discount.

(a) Notwithstanding other provisions of this article, it is hereby declared to be the intent of the Legislature that one rate of excise tax is applicable to all quantities of cigarettes and another rate of excise tax is applicable to all tobacco products other than cigarettes in this state on and after the first day of July, two thousand one, under the provisions of this article. Any tobacco products, on hand or in inventory, on the effective date of any rate change are hereby considered to have been purchased or received on the effective date of the change in rate.
(b) Every wholesaler, subjobber, subjobber dealer, retail dealer and vending machine operator who, on the effective date of any rate change, has, on hand or in inventory, any tobacco products or cigarette tax stamps, upon which the tax or any portion of the tax has been previously paid, shall take a physical inventory and shall file a report of the inventory with the tax commissioner, in the format required by the tax commissioner, within thirty days after the inventory, and shall pay to the tax commissioner, at the time of filing the report, any additional tax due under an increased rate. A discount of four percent shall be allowed on all tax due for persons who pay additional tax under this section.
(c) Imposition of the tax on tobacco products other than cigarettes shall be treated as a change in rate on the effective date of the tax.


NOTE: The purpose of this bill is to increase from seventeen cents to one dollar and seventeen cents the rate of the tax on cigarettes and reduce consumer sales tax on food sold for home consumption from 6% to 3%. The increase would also apply to cigarettes and cigarette tax stamps already on hand or in inventory on the effective date of the rate change, which is July 1,2003. The bill also dedicates the first five million dollars to the department of agriculture crop transition programs.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.