Date Requested: February 19, 2015
Time Requested: 03:33 PM
Agency: Tax Department, State
CBD Number: Version: Bill Number: Resolution Number:
3161 Introduced SB534
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 a pack of twenty cigarettes by $1.
    
    According to our interpretation, the bill will increase revenue by $126.6 million beginning in FY2016. Cigarette Tax revenue will increase by $128.4 million, and sales tax revenue will decrease by $1.8 million due to changes in consumer behavior reducing cigarette consumption because of the tax increase. The provisions of this bill also attempt to remove the requirement that revenue be deposited in the State General Revenue Fund. Removal of Cigarette and Tobacco Products Tax collections from the General Revenue Fund would reduce General Revenue Fund collections by $104.1 million, the amount deposited under current law.
    
    Administrative costs to the Tax Department will be $60,000 in the current fiscal year.



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 60,000 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 60,000 0 0
2. Estimated Total Revenues 0 126,700,000 126,700,000


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


    According to our interpretation, the bill will increase revenue by $126.6 million beginning in FY2016. Cigarette Tax revenue will increase by $128.4 million, and sales tax revenue will decrease by $1.8 million due to changes in consumer behavior reducing cigarette consumption because of the tax increase. The provisions of this bill also attempt to remove the requirement that revenue be deposited in the State General Revenue Fund. Removal of Cigarette and Tobacco Products Tax collections from the General Revenue Fund would reduce General Revenue Fund collections by $104.1 million, the amount deposited under current law.
    
    Administrative costs to the Tax Department will be $60,000 in the current fiscal year.
    



Memorandum


    



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