Date Requested:March 25, 2013
Time Requested:02:14 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
2013R2959 Introduced HB3138
CBD Subject: RAISE EXCISE TAX ON CIGARETTES
FUND(S)
General Revenue Fund, West Virginia Healthy Future Fund
Sources of Revenue
General Fund,Other Fund West Virginia Healthy Fut
Legislation creates:
A New Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

     The stated purpose of this bill is to raise the tobacco tax by $1 and dedicate half the proceeds to certain health related issues and the other half to the General Revenue Fund.
    
     As written, this bill would increase the tax on each twenty cigarettes from $0.55 to $1.55 and would increase the tax on tobacco products other than cigarettes from 7 percent of the wholesale price to 50 percent of the wholesale price. The bill also specifies that a portion of the revenue from the taxes is to be deposited to a new fund to be known as the “West Virginia Healthy Future Fund.” And, the bill indicates how a portion of the funds in the West Virginia Healthy Future Fund are to be expended.
    
     According to our interpretation that this bill would increase the tax on each twenty cigarettes from $0.55 to $1.55 and would increase the tax on tobacco products other than cigarettes from 7 percent of the wholesale price to 50 percent of the wholesale price and based upon available information, the tax increases would result in additional annual revenue of roughly $135.1 million per year. Also according to our interpretation that one-half of the combined tax revenue, up to an maximum annual amount of $60 million, would be deposited into the West Virginia Healthy Future Fund, the fund would receive $60 million per year while the General Revenue Fund would receive an additional $75.1 million per year.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $10,000 in FY2014. The Department of Health and Human Resources may incur additional administrative costs attributable to administering the programs funded from the West Virginia Healthy Future Fund.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2013
Increase/Decrease
(use"-")
2014
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 10,000 0
Personal Services 0 0 0
Current Expenses 0 500 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 9,500 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
     As written, this bill would increase the tax on each twenty cigarettes from $0.55 to $1.55 and would increase the tax on tobacco products other than cigarettes from 7 percent of the wholesale price to 50 percent of the wholesale price. The bill also specifies that a portion of the revenue from the taxes is to be deposited to a new fund to be known as the “West Virginia Healthy Future Fund.” And, the bill indicates how a portion of the funds in the West Virginia Healthy Future Fund are to be expended.
    
     According to our interpretation that this bill would increase the tax on each twenty cigarettes from $0.55 to $1.55 and would increase the tax on tobacco products other than cigarettes from 7 percent of the wholesale price to 50 percent of the wholesale price and based upon available information, the tax increases would result in additional annual revenue of roughly $135.1 million per year. Also according to our interpretation that one-half of the combined tax revenue, up to an maximum annual amount of $60 million, would be deposited into the West Virginia Healthy Future Fund, the fund would receive $60 million per year while the General Revenue Fund would receive an additional $75.1 million per year.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $10,000 in FY2014. The Department of Health and Human Resources may incur additional administrative costs attributable to administering the programs funded from the West Virginia Healthy Future Fund.


Memorandum
Person submitting Fiscal Note:
Mark B. Muchow
Email Address:
Roger.D.Cox@wv.gov