FISCAL NOTE
Date Requested: January 14, 2016
Time Requested: 04:27 PM |
| Agency: |
Tax Department, State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1427 |
Introduced |
SB139 |
|
|---|
| CBD Subject: |
|
|---|
|
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 the bill is to increase the tobacco tax to support PEIA.
According to our interpretation, the tax on cigarettes is the only tobacco tax that is increased. An increase in the cigarette tax from $.55 to $1.55 on a pack of 20 cigarettes would raise up to $105.7 million in revenue in FY 2017 and up to $115.3 million in FY 2018 and each year thereafter. All new revenue attributable to the increase in the cigarette tax rate is to be dedicated to the employer share of the PEIA premium. Some increase can be expected in FY 2016 as some consumers will stockpile on cigarettes to avoid paying for the increase in tax. Similarly, there may be a more significant decline in consumption during the early months of the new cigarette tax rate.
Administrative costs to the Tax Department would be $21,500 for Fiscal Year 2016.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2016
Increase/Decrease
(use"-") |
2017
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
21,500 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
21,500 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
105,700,000 |
115,300,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the tax on cigarettes is the only tobacco tax that is increased. An increase in the cigarette tax from $.55 to $1.55 on a pack of 20 cigarettes would raise up to $105.7 million in revenue in FY 2017 and up to $115.3 million in FY 2018 and each year thereafter. All new revenue attributable to the increase in the cigarette tax rate is to be dedicated to the employer share of the PEIA premium. Some increase can be expected in FY 2016 as some consumers will stockpile on cigarettes to avoid paying for the increase in tax. Similarly, there may be a more significant decline in consumption during the early months of the new cigarette tax rate.
Administrative costs to the Tax Department would be $21,500 for Fiscal Year 2016.
Memorandum
The stated purpose of the bill is to increase the tobacco tax to support PEIA.
The bill deletes the prior rate and effective date, making it confusing when it refers to an increase, and obscuring the rate for late filers.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov