H. B. 3135


(By Mr. Speaker, Mr. Thompson, and Delegate Armstead)

[By Request of the Executive]

[Introduced February 20, 2007; referred to the

Committee on Finance.]
A BILL to amend and reenact §11-19-2, §11-19-4 and §11-19-5 of the Code of West Virginia, 1931, as amended, and to amend said code by adding thereto a new section designated §11-19-13, all relating to the soft drinks tax; annually reducing said tax by approximately one-fourteenth each year for fourteen years; eliminating the requirement to use stamps, crowns and other indicia of taxation; authorizing the tax commissioner to prescribe the use of an invoice method to account for the tax liability by retail dealers, wholesale dealers and distributors; and authorizing the amount of discount to be available if the tax commissioner requires the use of the invoice method for collecting the amount of tax due.

Be it enacted by the Legislature of West Virginia:
That §11-19-2, §11-19-4 and §11-19-5 of the Code of West Virginia, 1931, as amended, be amended and reenacted, and that said
code be amended by adding thereto a new section, designated §11-19- 13, all to read as follows:
ARTICLE 19. SOFT DRINKS TAX.
§11-19-2. Excise tax on bottled soft drinks, syrups and dry mixtures; disposition thereof.

For the purpose of providing revenue for the construction, maintenance and operation of a four-year school of medicine, dentistry and nursing of West Virginia University, an excise tax is hereby levied and imposed on and after midnight of the last day of June, one thousand nine hundred fifty-one, upon the sale, use, handling or distribution of all bottled soft drinks and all soft drink syrups, whether manufactured within or without this State, as follows:
(1) On each bottled soft drink, a tax of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of eighty cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of eighty-four cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of one cent or on each 28.35 grams, or fraction thereof, a tax of one cent;
(4)On and after the first day of July, two thousand eight, the rate of tax hereby imposed shall be as stated in section thirteen of this article.
Any person manufacturing or producing within this State any bottled soft drink or soft drink syrup for sale within this State and any distributor, wholesale dealer or retail dealer or any other person who is the original consignee of any bottled soft drink or soft drink syrup manufactured or produced outside this State, or who brings such drinks or syrups into this State, shall be liable for the excise tax hereby imposed. The excise tax hereby imposed shall not be collected more than once in respect to any bottled soft drink or soft drink syrup manufactured, sold, used or distributed in this State.
All revenue collected by the commissioner under the provisions of this article, less such costs of administration as are hereinafter provided for, shall be paid by him into a special medical school fund, which is hereby created in the state treasury, to be used solely for the construction, maintenance and operation of a four-year school of medicine, dentistry and nursing, as otherwise provided by law.
§11-19-4. Affixing of tax stamps or tax crowns.
The payment of the taxes herein provided shall be evidenced by the affixing of soft drink tax stamps or tax crowns to the original containers or bottles in which any bottled soft drink or syrup is placed, received, stored or handled: Provided, That on and after the first day of July, two thousand eight, the tax imposed by this article on the sale, use, handling or distribution of all bottled soft drinks and all soft drink syrups, whether manufactured within or without this State, may be paid using an invoice method if so prescribed by the tax commissioner. Such stamps or crowns, of the appropriate denomination, shall be affixed to each container of syrup and to each bottled soft drink by the person who under the provisions of this article is first required to pay the tax thereon, within twenty-four hours after such person has such bottled soft drink or syrup in his possession for the first time. The provisions of this paragraph shall not apply to syrup used by bottlers in the manufacture of bottled soft drinks, or to bottled soft drinks or syrups which are transported through this State and which are not sold, delivered, used or stored herein, if transported in accordance with such rules and regulations as may be promulgated by the commissioner, or to any bottled drink or syrup which is manufactured in this State and sold to a purchaser outside this State.
Except as otherwise provided in this section, it shall be unlawful for any person to sell, use, handle or distribute any bottled soft drink or soft drink syrup to which the tax stamps or tax crowns required by this section are not affixed, and any person who shall violate this provision shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not less than one hundred dollars nor more than five hundred dollars, or by imprisonment for not more than six months, or by both such fine and imprisonment.
§11-19-5. Purchase of tax stamps or tax crowns; discounts and commissions; refunds and statute of limitations; effective date.

The commissioner is hereby authorized to promulgate rules and regulations governing the design, purchase, sale and distribution of tax stamps and tax crowns required by this article. Manufacturers or distributors of crowns may be required to furnish bond to ensure faithful compliance with such regulations. Any person desiring to purchase such crowns shall obtain from the commissioner an authorization to do so, which shall specify the number of crowns to be purchased, and upon shipment thereof the manufacturer shall transmit to the commissioner a copy of the invoice of such shipment. The commissioner shall not authorize the purchase of crowns by any person who is in default in the payment of any tax required by this article.
The commissioner shall sell the stamps required by this article, or may authorize any sheriff, or any bank or trust company in this State, to sell such stamps as his deputy, and may allow as a commission a fee of one half of one percent of the face value of all stamps sold by such deputy. In the sale of such stamps the commissioner shall allow the following discounts: On a sale of less than twenty-five dollars, no discount; on a sale of twenty-five dollars or over and less than fifty dollars, a discount of five percent; and on a sale of fifty dollars or more, a discount of ten percent: Provided, That if the tax commissioner requires the use of the invoice method for payment of the tax imposed by this article, the tax commissioner shall allow the following discounts for wholesale dealers and retail dealers: For a total tax due in an amount that is less than twenty-five dollars, there shall be no discount; for a total amount of tax due that is equal to or greater than twenty-five dollars but less than fifty dollars, the discount shall be five percent of the total tax due; and for a total amount of tax due that is equal to or greater than fifty dollars, the discount shall be ten percent of the tax due.
In the case of stamps, the tax imposed by this article shall be paid in advance at the time the stamps are purchased. In the case of tax crowns, the tax shall be paid in advance at the time the tax commissioner authorizes the purchase of such tax crowns, unless the purchaser applies for and obtains credit as provided in the following paragraph.
Whenever any person applies for an authorization to purchase tax crowns, he may apply for an extension of credit on the tax due with respect to such crowns, and if he files a bond in the form prescribed by the commissioner, with satisfactory corporate surety, in an amount not less than twenty-five percent more than the tax due with respect to the tax crowns to be purchased, the commissioner shall issue the necessary authorization. Any person who obtains such credit shall, on or before the fifteenth day of each month, file with the commissioner on forms prescribed by him a return stating the number of tax crowns used by such person during the preceding month, and he shall at the same time pay to the commissioner the tax due on the crowns so used: Provided, That if the tax commissioner requires the use of the invoice method for payment of the tax imposed by this article, there shall be no extension of credit for any amount of tax due.
The commissioner shall allow to each purchaser of tax crowns, whether for cash or credit, a discount of twelve and one half percent of the tax value of such crowns. Such discount, and the discount allowed on the sale of tax stamps, shall be in lieu of the allowance of any claim for refund by reason of the breakage or destruction of containers stamped or crowned as provided in this article, the spoilation of the soft drinks or syrups, or the loss or destruction of tax stamps or tax crowns. Provided, That when the tax stamps or crowns or soft drinks, soft drink powders or soft drink syrups upon which tax has been paid are destroyed by fire, lightning or flood and when soft drinks, syrups or powders upon which tax has been paid are exported from this State or are required to be destroyed pursuant to federal or state order, the taxpayer may file a claim for refund for an amount equal to the amount of tax actually paid for such stamps or crowns. The commissioner shall cause a refund to be made under this section only when a claim for refund is filed within one hundred and eighty days from the date the tax stamps or crowns were destroyed or the soft drink product upon which tax was paid were destroyed or exported from this State. Any claim for refund not timely filed shall not be construed to be or to constitute a moral obligation of this State for payment. Such claim for refund shall also be subject to the provisions of section fourteen, article ten of this chapter. At the election of the taxpayer, the amount of any refund may be established as a credit. The amount refunded or credited under this section shall not be subject to the interest provisions of subsection (d), section seventeen, article ten of this chapter: Provided, That if the tax commissioner requires the use of the invoice method for payment of the tax imposed by this article, the tax commissioner shall allow to each distributor a discount of twelve and one-half percent of the total tax due.
Effective date --The provisions of this section as hereby amended shall apply to soft drinks tax stamps or crowns destroyed on or after the first day of July, one thousand nine hundred eighty, and to soft drinks, powders and syrups exported or destroyed on or after the first day of said July. The provisions of this section in effect prior to the said first day of July shall apply to tax stamps, crowns and soft drinks, powders and syrups destroyed or exported prior to said date.
§11-19-13. Phase out and elimination of tax on bottled soft drinks, syrups and dry mixtures.

(a) Effective the first day of July, two thousand eight, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of ninety-three hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of seventy-four cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of seventy-eight cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of ninety-three hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of ninety-three hundredths of one cent.
(b) Effective the first day of July, two thousand nine, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of eighty-six hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of sixty-eight cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of seventy-two cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of eighty-six hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of eighty- six hundredths of one cent.
(c) Effective the first day of July, two thousand ten, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of seventy-nine hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of sixty-two cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of sixty-six cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of seventy-nine hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of seventy-nine hundredths of one cent.
(d) Effective the first day of July, two thousand eleven, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of seventy-two hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of fifty-six cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of sixty cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of seventy-two hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of seventy- two hundredths of one cent.
(e) Effective the first day of July, two thousand twelve, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of sixty-five hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of fifty cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of fifty-four cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of sixty-five hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of sixty- five hundredths of one cent.
(f) Effective the first day of July, two thousand thirteen, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of fifty-eight hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of forty-four cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of forty-eight cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of fifty-eight hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of fifty- eight hundredths of one cent.
(g) Effective the first day of July, two thousand fourteen, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of fifty-one hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of thirty-eight cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of forty-two cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of fifty-one hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of fifty- one hundredths of one cent.
(h) Effective the first day of July, two thousand fifteen, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of forty-four hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of thirty-two cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of thirty-six cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of forty-four hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of forty- four hundredths of one cent.
(i) Effective the first day of July, two thousand sixteen, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of thirty-seven hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of twenty-six cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of thirty cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of thirty-seven hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of thirty-seven hundredths of one cent.
(j) Effective the first day of July, two thousand seventeen, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of thirty hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of twenty cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of twenty-four cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of thirty hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of thirty hundredths of one cent.
(k) Effective the first day of July, two thousand eighteen, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of twenty-three hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of fourteen cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of eighteen cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of twenty-three hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of twenty-three hundredths of one cent.
(l) Effective the first day of July, two thousand nineteen, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of sixteen hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of eight cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of twelve cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of sixteen hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of sixteen hundredths of cent.
(m) Effective the first day of July, two thousand twenty, the rate of tax imposed under section two of this article shall be reduced to the following rates:
(1) On each bottled soft drink, a tax of nine hundredths of one cent on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.
(2) On each gallon of soft drink syrup, a tax of two cents, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of six cents, and in like ratio on each part four liters thereof.
(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of nine hundredths of one cent or on each 28.35 grams, or fraction thereof, a tax of nine hundredths of one cent.
(n) Effective the first day of July, two thousand twenty-one, the rate of tax imposed under section two of this article shall be eliminated.
NOTE: The purpose of this bill is to eliminate the Soft Drinks Tax by approximately $1 million per year in near equal amounts over a period of 14 years and to authorize the Tax Commissioner, in lieu of selling tax stamps and crowns, to use an invoice method to collect the tax imposed.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added. §11-19-13 is new; therefore, strike-throughs and underscoring have been omitted.