Date Requested: February 24, 2015
Time Requested: 01:29 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
2372 Revised HB2953
CBD Subject: Tax


FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


    The stated purpose of this bill is to increase the tax on tobacco and tobacco related products.
    
    The increase in cigarette taxes from $.55 per pack to $1 per pack will increase revenue by approximately $73 million per year, assuming that the cigarette tax change is effective at least ninety days from passage. An increase in the tax on other tobacco products from 7 percent to 39 percent will increase revenue by approximately $6 million in FY2016, and $14 million in each subsequent fiscal year.
    
    Administrative costs to the Tax Department will be $20,000 in FY2016.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 20,000 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 20,000 0
2. Estimated Total Revenues 0 79,700,000 87,000,000


Explanation of above estimates (including long-range effect):


    The increase in cigarette taxes from $.55 per pack to $1 per pack will increase revenue by approximately $73 million per year, assuming that the cigarette tax change is effective at least ninety days from passage. An increase in the tax on other tobacco products from 7 percent to 39 percent will increase revenue by approximately $6 million in FY2016, and $14 million in each subsequent fiscal year.
    
    Administrative costs to the Tax Department will be $20,000 in FY2016.



Memorandum


    The stated purpose of this bill is to increase the tax on tobacco and tobacco related products.
    
    The tax on cigarettes is amended in subsection (a) with no effective date. The amendment to the tax on other tobacco products is in subsection (b) with an effective date of January 1, 2016. The effective date in subsection (c) is May 1, 2003. It appears that the effective date for the tax on cigarettes is May 1, 2003.
    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov