FISCAL NOTE
Date Requested: January 23, 2024
Time Requested: 04:28 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2643 |
Introduced |
HB5037 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to establish the E-cigarette and E-cigarette Liquid Directory. The bill requires all manufacturers to obtain marketing authorization from the United States Food and Drug Administration before engaging in consumer sales in West Virginia. Manufacturers must also apply to the State Tax Commissioner and State Alcohol Beverage Control Commissioner and obtain approval from such agencies to be listed on the directory before engaging in consumer sales. Finally, the Alcohol Beverage Control Commissioner and the Tax Commissioner shall have joint regulatory enforcement authority over the directory.
Based on our interpretation, by July 1, 2024, and annually thereafter, manufacturers of e-cigarette products sold in West Virginia would be required to submit a “certification” to the Tax Commissioner and the ABC Commissioner listing every product they sell in the state, certifying market authorization by the United States Food and Drug Administration(FDA), and certifying that products have either been approved for sale by the FDA or that a decision is pending. The annual certification form must include a copy of FDA marketing authorization or evidence that authorization is pending and an annual payment of $100 for each product sold in the state.
Beginning September 1, 2024, either the Tax Commissioner or the ABC Commissioner must publish on their website a directory of all certified manufacturers and certified products. Manufacturers are required to give either the Tax Commissioner or the ABC Commissioner notice within 30 days of any material change in the information on the certification.
The bill prohibits sales by a manufacturer of products not listed on the directory after September 1, 2024. The bill includes procedures for removing manufacturers or their products from the directory and provides for penalties for violations. The bill provides for joint enforcement by the Tax Commissioner and the ABC Commissioner.
Based on our interpretation, the legislation, if passed, would have minimal impact on General Revenue Fund collections.
Additional administrative costs incurred by the State Tax Department would be $45,000 in FY2024, $51,500 in FY2025 and $50,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
45,000 |
51,500 |
50,000 |
| Personal Services |
0 |
50,000 |
50,000 |
| Current Expenses |
0 |
1,500 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
45,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Based on our interpretation, by July 1, 2024, and annually thereafter, manufacturers of e-cigarette products sold in West Virginia would be required to submit a “certification” to the Tax Commissioner and the ABC Commissioner listing every product they sell in the state, certifying market authorization by the United States Food and Drug Administration(FDA), and certifying that products have either been approved for sale by the FDA or that a decision is pending. The annual certification form must include a copy of FDA marketing authorization or evidence that authorization is pending and an annual payment of $100 for each product sold in the state.
Beginning September 1, 2024, either the Tax Commissioner or the ABC Commissioner must publish on their website a directory of all certified manufacturers and certified products. Manufacturers are required to give either the Tax Commissioner or the ABC Commissioner notice within 30 days of any material change in the information on the certification.
The bill prohibits sales by a manufacturer of products not listed on the directory after September 1, 2024. The bill includes procedures for removing manufacturers or their products from the directory and provides for penalties for violations. The bill provides for joint enforcement by the Tax Commissioner and the ABC Commissioner.
Based on our interpretation, the legislation, if passed, would have minimal impact on General Revenue Fund collections.
Additional administrative costs incurred by the State Tax Department would be $45,000 in FY2024, $51,500 in FY2025 and $50,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to establish the E-cigarette and E-cigarette Liquid Directory. The bill requires all manufacturers to obtain marketing authorization from the United States Food and Drug Administration before engaging in consumer sales in West Virginia. Manufacturers must also apply to the State Tax Commissioner and State Alcohol Beverage Control Commissioner and obtain approval from such agencies to be listed on the directory before engaging in consumer sales. Finally, the Alcohol Beverage Control Commissioner and the Tax Commissioner shall have joint regulatory enforcement authority over the directory.
The bill provides for civil monetary penalties for violations. It also states that providing false information is a misdemeanor, though no specific penalty is prescribed.
The bill provides for joint enforcement by the Tax Commissioner and the ABC Commissioner, including examination of books and premises, and unannounced compliance checks. The bill authorizes, but does not mandate, a legislative rule.
The bill provides that a determination to remove a manufacturer or product from the directory “shall be subject to review by filing a civil action for prospective declaratory or injunctive relief.” The bill is silent as to the appropriate venue for filing.
The bill requires the Tax Commissioner and ABC Commissioner to file an annual report with the joint committee on government and finance, beginning December 31, 2024, and annually thereafter.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov