FISCAL NOTE
Date Requested: January 16, 2026
Time Requested: 03:13 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2344 |
Introduced |
HB4482 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Creates New Revenue, Increases Revenue From Existing Sources
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The stated purpose of this bill is to update the state tax rates on e-cigarettes, e-cigarette liquids, and components or accessories for such devices and increasing penalties.
According to our interpretation, on and after July 1, 2026, the West Virginia tobacco excise tax rate for e-cigarettes and all electronic open and closed vaping systems would increase from $0.075 per ml to 50 percent of the wholesale price of e-cigarettes and any or all electronic open or closed vaping system devices. The average wholesale price of a closed disposable vape is $0.40 per ml for a 10ml to 15ml device. The average wholesale price of an open vape is $0.20 per ml for a standard 30 ml bottle. A floor tax on electronic cigarette inventory would be included during the first year of implementation which is equivalent to the difference between the old and new tax rates multiplied by the quantity of inventory on hand. Passage of this bill would increase General Revenue Fund collections by $3.7 million in FY2027 and $10.7 million per year in FY2028 and thereafter.
The provisions of this bill would also increase the penalty for non-filing of reports from $25 per month to $500 per month. This bill also allows the Tax Commissioner to establish an initial application and annual renewal fee of a maximum of $500 to be retained by the Tax Commissioner for the application of administrative costs related to processing distributor’s license applications, conducting background investigations, and issuing distributor’s licenses for the sale of any e-cigarette, e-cigarette liquid, or any component or accessory of such devices and materials.
Additional administrative costs incurred by the State Tax Division would be $92,670 in FY2026 and $44,820 per year beginning in FY2027 and thereafter. These costs would be covered by a license fee imposed on e-cigarette distribution.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
92,670 |
44,820 |
44,820 |
| Personal Services |
44,820 |
44,820 |
44,820 |
| Current Expenses |
1,650 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
46,200 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
3,700,000 |
10,700,000 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
According to our interpretation, on and after July 1, 2026, the West Virginia tobacco excise tax rate for e-cigarettes and all electronic open and closed vaping systems would increase from $0.075 per ml to 50 percent of the wholesale price of e-cigarettes and any or all electronic open or closed vaping system devices. The average wholesale price of a closed disposable vape is $0.40 per ml for a 10ml to 15ml device. The average wholesale price of an open vape is $0.20 per ml for a standard 30 ml bottle. A floor tax on electronic cigarette inventory would be included during the first year of implementation which is equivalent to the difference between the old and new tax rates multiplied by the quantity of inventory on hand. Passage of this bill would increase General Revenue Fund collections by $3.7 million in FY2027 and $10.7 million per year in FY2028 and thereafter.
The provisions of this bill would also increase the penalty for non-filing of reports from $25 per month to $500 per month. This bill also allows the Tax Commissioner to establish an initial application and annual renewal fee of a maximum of $500 to be retained by the Tax Commissioner for the application of administrative costs related to processing distributor’s license applications, conducting background investigations, and issuing distributor’s licenses for the sale of any e-cigarette, e-cigarette liquid, or any component or accessory of such devices and materials.
Additional administrative costs incurred by the State Tax Division would be $92,670 in FY2026 and $44,820 per year beginning in FY2027 and thereafter. These costs would be covered by a license fee imposed on e-cigarette distribution.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
The stated purpose of this bill is to update the state tax rates on e-cigarettes, e-cigarette liquids, and components or accessories for such devices and increasing penalties.
The bill does not impose a tax at the retail price but rather on the “taxable sale” which is undefined.
This bill has other drafting problems. It crosses out new language that should have been underlined that make it difficult to read. The State Tax Division would likely interpret “taxable sale” as the sale between the wholesaler and the retailer (or wholesale price) given the impetus of the proposed tax is on the wholesaler.
Currently, the Tobacco Excise Tax is imposed “on sales of e-cigarette liquid at the rate of 7.5 cents per milliliter or fraction thereof, or if not sold, then at the same rate upon the use by the wholesaler or dealer”. It is unclear whether the proposed tax is implemented in a similar manner.
Subsection (h) gives the Tax Commissioner authority to establish an initial application and renewal fee not to exceed $500 and sets forth how the money will be used. The specific fund name is which the money will be held is not identified.
Person submitting Fiscal Note: Mark Muchow
Email Address: radfiscal@wv.gov