Senate Bill No. 627
(By Senator Rowe)
____________
[Introduced February 23, 2004; referred to the Committee on
Finance.]
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A BILL to amend the code of West Virginia, 1931, as amended, by
adding thereto a new section, designated
§11-15-9h; to amend
and reenact §11-16-13
of said code;
to amend and reenact
§11-17-3
of said code; to amend and reenact
§60-3A-17 of said
code; and to amend and reenact
§60-8-4 of said code,
all
relating to enacting the "Family Meal Tax Relief Act of 2004";
reducing six percent sales tax on packaged food and
fresh-grown food sold for human consumption off the premises
where sold in two successive fiscal years by one percent each
year; increasing tax on beer to twelve percent of the
wholesale price; establishing container tax on containers of
nonintoxicating beer; exempting beer tax on beer consumed or
sold at retail at the premises of a brewpub; increasing tax on
tobacco products other than cigarettes to fourteen percent of
the wholesale price of each article or item; increasing tax on cigarettes effective the first day of July, two thousand five,
to thirty-one percent of the wholesale price on each twenty
cigarettes; providing for a wholesale markup of liquor prices
in order to produce the general revenue fund at least sixteen
million dollars; setting the rate of liter tax on wine at
seven percent of the wholesale price; and providing for the
tax commissioner to promulgate rules for the implementation of
the act.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §11-15-9h
; that
§11-16-13
of said code be amended and reenacted; that
§11-17-3
of
said code be amended and reenacted; that §60-3A-17
of said code be
amended and reenacted; and that §60-8-4
of said code be amended and
reenacted, all to read as follows:
CHAPTER 11. TAXATION.
ARTICLE 15. CONSUMERS SALES TAX.
§11-15-9h. Reducing the sales tax on grocery foods; effective
date.
(a) This section is titled the "Family Meal Tax Relief Act of
2004."
(b) Notwithstanding any other provision of law to the
contrary, effective the first day of July, two thousand four, the consumer sales tax on packaged and fresh grown food sold, for human
consumption off the premises where sold, shall be reduced from six
percent to five percent and effective the first day of July, two
thousand five, the consumer sales tax on packaged and fresh grown
food sold, for human consumption off the premises where sold, shall
be reduced from five percent to four percent
.
(c) As used in this section, the term "packaged food and fresh
grown food sold for human consumption off the premises where sold"
does not include food prepared in a kitchen or restaurant or on
premises of the retail facility for carry out and immediate
consumption by the purchaser or persons related to or associated
with the purchaser.
The tax commissioner shall promulgate rules in conformity with
the provisions of article three, chapter twenty-nine-a of this code
to provide for the administration of the
"Family Meal Tax Relief
Act of 2004."
ARTICLE 16. NONINTOXICATING BEER.
§11-16-13. Barrel and container tax on nonintoxicating beer.
(a) (1) Effective the first day of July, two thousand four, as
part of the "Family Meal Tax Relief Act of 2004," pursuant to
section nine-h, article fifteen, chapter eleven of this code, there
is hereby levied and imposed, in addition to the license taxes
provided for in this article, a tax of five dollars and fifty cents
at the rate of twelve percent of wholesale price on each barrel or other container of thirty-one gallons and in like ratio on each
part barrel of nonintoxicating beer:
(A) Manufactured in this state for sale within this state,
whether contained or sold in barrels, bottles or other containers;
and a like tax is hereby levied and imposed upon
(B) All nonintoxicating beer manufactured outside of this
state and brought into this state for sale within this state. but
(2) No nonintoxicating beer manufactured, sold or distributed
in this state is subject to more than one barrel tax.
(3) The brewer manufacturing or producing nonintoxicating beer
within this state for sale within this state shall pay the barrel
tax on such the nonintoxicating beer and, except as provided
otherwise, the distributor who is the original consignee of
nonintoxicating beer manufactured or produced outside of this
state, or who brings such the nonintoxicating beer into this state,
shall pay the barrel tax on such the nonintoxicating beer
manufactured or produced outside of this state. Provided, That
(4) The barrel or container tax imposed by this section shall
does not apply to nonintoxicating beer manufactured by a brewpub
for consumption on its premises or for retail sale by the brewpub
at the premises of its manufacturing process.
(b) (1) On or before the tenth day of each month during the
license period, every brewer or operator of a brewpub who
manufactures or produces nonintoxicating beer within this state shall file a report in writing, under oath, to the tax
commissioner, in the form prescribed by the tax commissioner,
stating its total sales, or in the case of a brewpub, its total
estimated production of nonintoxicating beer within this state
during that month, and at the same time shall pay the tax levied by
this article on such the production.
(2) On or before the tenth day of each month during the
license period, every distributor who is the original consignee of
nonintoxicating beer manufactured or produced outside this state or
who brings such the beer into this state for sale shall file a
report in writing, under oath, to the tax commissioner, in the form
prescribed by the tax commissioner, stating its total estimated
purchases of such nonintoxicating beer during that month, and at
the same time shall pay the tax thereon levied by this article for
such the estimated monthly purchase. Provided, That
(3) The tax commissioner may allow, or require, a brewer who
manufactures or produces nonintoxicating beer outside this state to
file the required report and pay the required tax on behalf of its
distributor or distributors. Any brewer or distributor or operator
of a brewpub who files a report under this subsection may adjust
its monthly estimated sales or purchases or production report or
reports by filing amended reports by the twenty-fifth day of the
reporting month.
(c) Every brewer or distributor or operator of a brewpub who files a report under subsection (b) of this section shall file a
final monthly report of said the sales or purchases or production,
in a form and at a time prescribed by the tax commissioner, stating
actual nonintoxicating beer sales, purchases, or production and
other information which the tax commissioner may require, and shall
include a remittance for any barrel or container tax owed for
actual sales or purchases or production made in excess of the
amount estimated for that month.
(d) Any brewer or distributor or operator of a brewpub who
files a report pursuant to subsection (b) of this section
reflecting an underestimation of twenty-five percent or more of
actual sales or purchases or production of nonintoxicating beer as
shown by the report filed pursuant to subsection (c) of this
section shall be assessed a penalty of one percent of the total
taxes due in such the prior month.
(e) Brewers and distributors and operators of brewpubs shall
keep all records which relate to the sale or purchase in this state
of nonintoxicating beer for a period of three years unless written
approval for earlier disposal is granted by the tax commissioner.
(f) Brewpubs shall keep such records as required by the
federal government and may, in lieu of the recordkeeping and
reporting requirements contained in subsections (a) through (e) of
this section, file copies of the federal reports contemporaneously
with the tax commissioner at the time of such the filings with the federal government. The filing of duplicate copies of the federal
reports with the state tax commissioner shall be deemed as is
considered compliance with subsections (a) through (e) of this
section.
(g) Revenue collected from the beer tax levied and imposed by
this section shall be deposited to the general revenue fund.
ARTICLE 17. TOBACCO PRODUCTS EXCISE TAX ACT.
§11-17-3. Levy of tax; ratio; dedication of proceeds.
(a) Tax on cigarettes. - For the purpose of providing revenue
for the general revenue fund of the state, an excise tax is hereby
levied and imposed on sales of cigarettes at the rate of fifty-five
cents on each twenty cigarettes or in like ratio on any part
thereof until the first day of July, two thousand five.
Effective
the first day of July, two thousand five, as part of the "Family
Meal Tax Relief Act of 2004," pursuant to section nine-h, article
fifteen, chapter eleven of this code,
the excise tax hereby levied
and imposed on the sales of cigarettes shall be thirty-one percent
of the wholesale price on each twenty cigarettes or in like ratio
on any part of twenty cigarettes. Only one sale of the same article
shall be used in computing the amount of tax due under this
subsection.
(b) Tax on tobacco products other than cigarettes. --
Effective the first day of January July, two thousand two four
as part of the "Family Meal Tax Relief Act of 2004," pursuant to
section nine-h, article fifteen, chapter eleven of this code,
an
excise tax is hereby levied and imposed on the sale or use of,
other than cigarettes, tobacco products at a rate equal to seven
fourteen percent of the wholesale price of each article or item of
tobacco product other than cigarettes sold by the wholesaler or
subjobber dealer, whether or not sold at wholesale, or if not sold,
then at the same rate upon the use by the wholesaler or dealer.
Only one sale of the same article shall be used in computing the
amount of tax due under this subsection. Revenues received
collected from this tax the taxes levied by this section shall be
deposited into the general revenue fund.
(c) Effective date. -- The changes set forth herein to this
section and section four of this article shall become effective the
first day of May, two thousand three.
CHAPTER 60. STATE CONTROL OF ALCOHOLIC LIQUORS.
ARTICLE 3A. SALES BY RETAIL LIQUOR LICENSEES.
§60-3A-17. Wholesale prices set by commissioner; retail licensees
to purchase liquor from state; transportation and
storage; method of payment.
(a) The commissioner shall fix wholesale prices for the sale
of liquor, other than wine, to retail licensees. The commissioner shall sell liquor, other than wine, to retail licensees according
to a uniform pricing schedule. The commissioner shall obtain if
possible, upon request, any liquor requested by a retail licensee.
(b)
Effective the first day of July, two thousand four, as
part of the "Family Meal Tax Relief Act of 2004," pursuant to
section nine-h, article fifteen, chapter eleven of this code,
wholesale prices shall be established in order to yield a net
profit for the general
revenue fund of not less than
six sixteen
million
five hundred thousand dollars annually on an annual volume
of business equal to the average for the past three years. The net
revenue derived from the sale of alcoholic liquors shall be
deposited into the general revenue fund in the manner provided in
section seventeen, article three of this chapter.
(c) The commissioner shall specify the maximum wholesale
markup percentage which may be applied to the prices paid by the
commissioner for all liquor, other than wine, in order to determine
the prices at which all liquor, other than wine, will be sold to
retail licensees. A retail licensee shall purchase all liquor,
other than wine, for resale in this state only from the
commissioner, and the provisions of sections twelve and thirteen,
article six of this chapter
shall does not apply to the
transportation of the liquor:
Provided, That a retail licensee
shall purchase wine from a wine distributor who is duly licensed under article eight of this chapter. All liquor, other than wine,
purchased by retail licensees shall be stored in the state at the
retail outlet or outlets operated by the retail licensee:
Provided, however, That the commissioner, in his or her discretion,
may upon written request permit a retail licensee to store liquor
at a site other than the retail outlet or outlets.
(d) The sale of liquor by the commissioner to retail licensees
shall be paid by electronic funds transfer which shall be initiated
by the commissioner on the business day following the retail
licensees order or by money order, certified check or cashier's
check which shall be received by the commissioner at least
twenty-four hours prior to the shipping of the alcoholic liquors:
Provided, That if a retail licensee posts with the commissioner an
irrevocable letter of credit or bond with surety acceptable to the
commissioner from a financial institution acceptable to the
commissioner guaranteeing payment of checks, then the commissioner
may accept the retail licensee's checks in an amount up to the
amount of the letter of credit.
(e) (1) A retail licensee may not sell liquor to persons
licensed under the provisions of article seven of this chapter at
less than one hundred ten percent of the retail licensee's cost as
defined in section six, article eleven-a, chapter forty-seven of
this code.
(2) A retail licensee may not sell liquor to the general
public at less than one hundred ten percent of the retail
licensee's cost as defined in section six, article eleven-a,
chapter forty-seven of this code.
ARTICLE 8. SALE OF WINES.
§60-8-4. Wine liter tax.
Effective the first day of July, two thousand four, as part of
the "Family Meal Tax Relief Act of 2004," pursuant to section
nine-h, article fifteen, chapter eleven of this code, there is
hereby levied and imposed on all wine sold
after the thirtieth day
of April, one thousand nine hundred eighty-three, by suppliers to
distributors, except wine sold to the commissioner, a tax of
twenty-six and four hundred six-thousandths cents per liter seven
percent of wholesale price.
Before the sixteenth day of each month,
thereafter every
supplier shall make a written report under oath to the tax
commissioner showing the identity of the purchaser, the quantity,
label and alcoholic content of wine sold by the supplier to West
Virginia distributors during the preceding month, and at the same
time shall pay the tax imposed by this article on the wine sold to
the distributor during the preceding month.
The reports shall contain other information and be in the form
the tax commissioner may require. For purposes of this article, the reports required by this section
shall be considered are tax
returns covered by the provisions of article ten, chapter eleven of
this code.
No wine imported, sold or distributed in this state
shall be
is subject to more than one liter tax.
NOTE: The purpose of this bill is to enact the "Family Meal
Tax Relief Act of 2004," reducing the sales tax on groceries by one
percent each year for the next two fiscal years.
The elimination of the tax would be partially offset by
increasing other taxes on certain products, including beer, liquor,
soft drinks, cigarettes and other tobacco products. The product
taxes, other than the liquor wholesale markup amounts, would become
taxes payable at rates stated as a percentage of wholesale price.
The grocery tax is a 6% sales tax which produces revenue
currently in the amount of approximately $140 million. This tax
increases as the price of groceries increase.
The current tax amounts collected for these products
appropriate the following sums: (1) Cigarettes, - $100.0 million;
(2) beer - $7.4 million; (3) liquor -$9.0 million; (4) other
tobacco products - $4.5 million (estimated for first full year of
the tax); and (5) wine liters - $1.0 million.
In fiscal year 2004-05, the grocery tax is reduced from six
percent to five percent and in fiscal year 2005-06, the grocery tax
is reduced to four percent. These reductions in revenue are offset
as follows: (1) Beer - $14.0 million; (2) liquor -$5.0 million;
(3) other tobacco products - $4.5 million (estimated for first full
year of the tax); (4) wine liters - $1.0 million; and (6)
Cigarettes after July 1, 2005, - $30 million
.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§11-15-9h
is new; therefore, strike-throughs and underscoring
have been omitted.