SB392 HFIN AM
McO
The Committee on Finance moves to amend the bill on page one, following the enacting clause, by striking out the remainder of the bill and inserting in lieu thereof the following:
(a) Definitions. — When used in this section, words, terms, and phrases defined in this subsection, and any variations thereof required by the context, have the meaning ascribed to them in this subsection, except where the context indicates a different meaning is intended.
(1) “E-cigarette” means an electrical or electronic device that provides a smoke, vapor, fog, mist, gas or aerosol suspension of nicotine or another substance that, when used or inhaled, simulates the activity of smoking. The term e-cigarette includes, but is not limited to, a device any noncombustible product that is composed of a heating element, battery, or electrical or electronic circuit, or a combination of heating element, battery and electrical or electronic circuit, other electronic, chemical, or mechanical means, regardless of shape or size and including the component parts and accessories thereto, which works in combination with e-liquid e-cigarette liquid to produce an inhalable product that uses a refillable or non-refillable liquid solution to deliver vaporized or aerosolized nicotine, non-nicotine substances, or other materials which users may be inhaling from the product, regardless of whether marketed as such. The term e-cigarette includes, but is not limited to, any so designed, or similarly designed, product that is manufactured, distributed, marketed, or sold as an e-cigarette, e-cigar, e-pipe, or under any other name or descriptor, and any cartridge or container of e-cigarette liquid. The term “simulates the activity of smoking”, in the context of this definition, means replicating, mimicking, or reproducing an experience similar to inhaling, or otherwise drawing into the mouth or nose, or exhaling the smoke or combustion product of burning tobacco or any other product or material that can be used in a similar fashion.
(2) “E-cigarette liquid” means any of the liquids or liquid mixtures used in e-cigarettes and is also known as e-juice, e-fluid, e-liquid, or e-liquid product. E-cigarette liquid includes e-cigarette liquid mixing kits and e-cigarette liquid mixing kit components. When used in, or with, an e-cigarette, e-cigarette liquid is vaporized or otherwise converted into an inhalable product. E-cigarette liquid may or may not include, without limitation, propylene glycol, vegetable glycerin, nicotine from any source, or flavorings.
(b) Levy of tax; rate. —
(1) On and after July 1, 2016 2026, an excise tax is levied and imposed on sales of e-cigarette liquid at the rate of 7.5 25 cents per milliliter or fraction thereof, or if not sold, then at the same rate upon the use by the wholesaler or dealer. For purposes of this article, any distributor, dealer, subjobber, subjobber dealer, retailer or any other person that imports or transports e-cigarette liquids into this state, or that causes e-cigarette liquids to be imported or transported into this state, is hereby deemed to be a wholesaler for purposes of this section and is liable for the tax imposed under this article. No wholesaler or other person may purchase e-cigarette liquids from any seller not approved by the Tax Commissioner. E-cigarette liquid mixing kits and e-cigarette liquid mixing kit components shall be taxed in accordance with the amount of e-cigarette liquid, in milliliters, that can be produced by or from the kit or components thereof, as determined by the Tax Commissioner.
(2) Only one sale of e-cigarette liquid shall be used in computing the amount of tax due under this section.
(c) How tax paid; invoice required; reports required; due date; records to be kept. —
(1) The tax imposed in this section on e-cigarettes and e-cigarette liquid shall be paid using an invoice method prescribed by the Tax Commissioner.
(2) The tax will be paid on any and all e-cigarettes and e-cigarette liquid coming into the state for the purpose of sale or use in this state on and after July 1, 2016 July 1, 2026.
(3) Contents of delivery ticket or invoice. — Unless otherwise permitted in writing by the Tax Commissioner, each delivery ticket or invoice for each purchase or sale of e-cigarette liquid must be recorded upon a serially numbered invoice showing:
(A) The name and address of the seller and the purchaser;
(B) The point of delivery;
(C) The date;
(D) (i) The number of e-cigarettes, e-cigarette cartridges, apparatus, containers or other devices; (ii) the quantity in milliliters of each cartridge, apparatus, container or other device; (iii) the wholesale price of each e-cigarette cartridge, apparatus, container or other device delivered in this state; or (iv) if sold outside of a cartridge or other device or container, the total quantity in milliliters of e-cigarette liquid not in cartridges, apparatus or other device or container delivered in this state and the wholesale price of the e-cigarette liquid;
(E) The invoice must either set out the amount of tax imposed by this article separately on the invoice or the invoice may instead indicate that the tax imposed under this article is included in the total price; and
(F) Any other information required by the Tax Commissioner.
(4) Reports and payments due date. — On or before the 15th day of each month, manufacturers, importers, every place of business as defined in this article, retail dealers, sub-jobbers, vending machine operators and wholesale dealers and their agents shall file a report covering the business transacted in the previous month providing any information the Tax Commissioner determines necessary for the ascertainment or assessment of the taxes imposed by this article. Reports shall be signed under penalty of perjury and be in a form as prescribed by the Tax Commissioner. The amount of tax shown to be due on the monthly report, if any, shall be remitted on or before the due date of the monthly report. Effective July 1, 2026, the first report due for e-liquid sales is August 15, 2016, for the sales completed in July 2016 August 15, 2026, for the sales completed in July, 2026.
(5) Reports required. — The reports prescribed in this article are required, although a tax may not be due or no business transacted, for the period covered by the report. In the case of any failure to file a report on the date prescribed for filing when no tax is due, unless it is shown that the failure was due to reasonable cause, there is hereby imposed a penalty of $25 for each month or fraction of a month that such report is delinquent, until the report is filed, in addition to any penalties imposed under §11-17-19a of this code.
(6) Records. — Each person required to file a report shall make and keep the records necessary to substantiate the accuracy of the reports required by this section including, but not limited to, records of inventories, receipts, disbursements and sales. Records shall be retained for a period of time not less than three years from the time the report is due or the time when the report is filed, whichever is later.
(d) Inspection of records and stocks; examination of witnesses; registration of e-cigarette sellers; presumption of nontax paid. —
(1) The Tax Commissioner has the authority to inspect or examine the records, books and papers, and any equipment or e-cigarette apparatus, and any stock of e-cigarette liquid kept in or upon the premises of persons who sell, possess, or store e-cigarette liquid, for the purpose of determining the quantity and value of e-cigarette liquid acquired, on hand or disbursed, to verify the truth and accuracy of any statement, return, form, or report and to ascertain whether the tax imposed by this article has been properly paid.
(2) Any manufacturer, wholesaler, distributor, or retail dealer that receives, stores, sells, handles, or transports e-cigarette liquid shall retain all invoices, records, and other documents relating to the purchase, receipt, sale, or distribution of such products for a period of three years.
(3) All such records shall be open to inspection and audit at any reasonable time by the Tax Commissioner or the Tax Commissioner’s authorized agents. Copies shall be provided upon request.
(4) Failure to maintain or produce such records upon request shall result in a civil penalty of $1,000 per day for each day of noncompliance, to be assessed and collected in the same manner as other penalties under this article.
(5) Refusal to permit inspection or audit may result in suspension or revocation of any registration or license issued under this article.
(2) (6) In addition to the Tax Commissioner’s powers set forth in §11-10-1 et seq. of this code, the Tax Commissioner or the Tax Commissioner’s agent may examine witnesses under oath in order to ascertain the amount of taxes and reports due under this article. If a witness or person fails or refuses to testify or grant access to records, books, papers, equipment, or e-cigarette apparatus, or any stock of e-cigarette liquid, necessary or useful to ascertain the amount of taxes and reports due under this article, the Tax Commissioner shall certify the facts and names to the circuit court of the county having jurisdiction of the party and the court shall issue a summons to the party to appear before the Tax Commissioner at a place designated within the jurisdiction of the court, on a day fixed, to be continued as the occasion may require for good cause shown, to testify and give evidence and to produce for inspection any books, records, and papers that may be required and to grant access to records, books, papers, equipment, or e-cigarette apparatus, or any stock of e-cigarette liquid, for the purpose of ascertaining the amount of tax and reports due, if any.
(3) (7) Each wholesale dealer of e-cigarette liquid must register with the Tax Commissioner and maintain a business registration certificate, showing the wholesale dealer of e-cigarette liquid to be registered as a seller of tobacco products or seller of both cigarettes and tobacco products prior to the sale or delivery of e-cigarette liquid to any retail dealer or sub-jobber in this state. A wholesale dealer may sell tax-paid e-cigarette liquid only to another wholesaler or a retail dealer or sub-jobber in this state. No person may purchase nontaxed e-cigarette liquid from any seller not approved by the Tax Commissioner.
(4) (8) Whenever e-cigarette liquid is found in the place of business of any retail dealer, without evidence that the tax imposed by this section has been paid, it shall be presumed that the e-cigarette liquid is kept on the premises in violation of this article.
(9) No e-cigarette liquid may be sold, offered for sale, distributed, or possessed for sale at retail in this state unless the product was acquired from a wholesale dealer registered with the Tax Commissioner pursuant to this section.
(10) A manufacturer may not sell or ship e-cigarette liquid directly to a retail dealer in this state.
(11) Any product distributed in violation of this subsection shall be deemed contraband and subject to seizure and forfeiture pursuant to §11-17-19a of this code.
(e) Bond. — The Tax Commissioner may require wholesalers, sub-jobbers, or retail dealers to file a continuous surety bond in an amount to be fixed by the Tax Commissioner but no less than $1,000. The bond shall be conditioned upon faithfully complying with the provisions of this article including the filing of the returns and payment of all taxes prescribed by this article.
(f) Administration and enforcement. — The provisions of this article and §11-9-1 et seq. and §11-10-1 et seq. of this code apply to administration and enforcement of the excise tax on e-cigarette liquid in the same manner and to the same extent as they apply to administration and enforcement of the excise tax on tobacco products, as imposed under this article.
(g) Criminal sanctions. — The criminal sanctions imposed in §11-17-19a of this code are hereby imposed with equal force and application with relation to actions, transactions and responsibilities prescribed under this section and under this article. For the purpose of applying and interpreting the provisions of §11-17-19a of this code, the words “container of tobacco products” shall be interpreted to mean and include the words “container of tobacco products or e-cigarette liquid”.
(h) Effect of rate changes; e-cigarette liquid on hand or in inventory; report; discount. —
(1) Inventory on hand or in inventory on July 1, 2026, is considered purchased or sold for the purposes of the imposition of the new rate on the effective date of the rate change;
(2) Every wholesaler, subjobber, subjobber dealer, retail dealer, and vending machine operator holding untaxed or previously taxed inventory as of July 1, 2026, shall conduct a physical inventory and file a report with the Tax Commissioner;
(3) Reports and payment of additional tax due under the new rate must be submitted within sixty days of the rate change;
(4) A four percent discount is allowed for timely payment of the additional tax.
(a) For the purposes of this section, the terms defined in this section have the meanings ascribed to them unless a different meaning is clearly required by the context in which the term is used:
(1) "Adjusted consumer price ratio" means the fiscal year consumer price index divided by the base year consumer price index.
(2) "Adjusted general revenue fund collections" means all net general revenue fund collections minus the net general revenue fund collections related to the imposition of the taxes imposed under the provisions of §11-13A-1 et seq. of this code.
(3) "Base year revenues" means actual general revenue fund collections for 2019 fiscal year, which is $4,293,884,754.
(4) "Base year consumer price index" means a 12-month average of the not seasonally adjusted Consumer Price Index for all urban consumers for the months between July 2018 and June 2019.
(5) "Excess fiscal year general revenue fund collections" means the positive difference from subtracting the inflation adjusted base year revenues from the adjusted general revenue fund collections from the immediately preceding fiscal year.
(6) "Fiscal year consumer price index" means a 12-month average of the not seasonally adjusted Consumer Price Index for all urban consumers for the months between July and June of the immediately preceding fiscal year.
(7) "Inflation adjusted base year revenues" means the base year general revenue fund collections multiplied by the adjusted consumer price ratio.
(b) Future personal income tax rate reductions. — Beginning on August 15, 2025 2026, and every August 15 thereafter, the Secretary of Revenue will determine whether the total fiscal year adjusted general revenue fund collections from the immediately preceding fiscal year are in excess of the inflation adjusted base year revenues. If the total fiscal year adjusted general revenue fund collections from the immediately preceding fiscal year are in excess of the inflation adjusted base year revenues, then there will be a reduction in the personal income tax rates as determined under this section beginning the second taxable year following the determination.
(c) Determination of rate. — In order to determine the amount of a personal income tax reduction, the excess fiscal year general revenue fund collections will be divided by the amount of the immediately preceding fiscal year’s total personal income tax collections for all funds and will be rounded down to the nearest whole percentage. The amount of the percentage of reduction will be applied equally across the tax rates applicable in the tax year immediately preceding the rate reduction: Provided, That reduction in personal income tax rates may not result in an amount larger than a 10 percent reduction in the rates set forth in §11-21-4e of this code.
(d) Certification of reduction. – The Secretary of Revenue and the State Auditor will certify to the Tax Commissioner that a rate change is required under this section as soon as possible after August 15 so that the Tax Commissioner may notify taxpayers of any change in personal income tax rates. The certification will provide base year revenues, the total fiscal year general revenue fund collections from the immediately preceding fiscal year, the base year consumer price index, the fiscal year consumer price index, the adjusted consumer price ratio, the amount of inflation adjusted base year revenues, the amount of excess fiscal year general revenue fund collections and the amount of the immediately preceding fiscal year’s total personal income tax collections for all funds.
(e) Applicability of this section. — The provisions of this section shall be applicable in determining the rates of tax imposed by this article and shall apply for all taxable years beginning on and after January 1, 2026 2027, and shall be in lieu of the rates of tax specified in §11-21-4i §11-21-4j of this code.
(f) Annual reports. — The Tax Commissioner shall prepare an annual report to the Joint Committee on Government and Finance detailing any relevant modifications to the personal income tax.
(g) Rulemaking. — Notwithstanding any provision of this code to the contrary, the Tax Commissioner may propose rules for legislative approval in accordance with the provisions of §29A-3-1 et seq. of this code explaining and implementing this section.
(a) Rate of tax on individuals (except married individuals filing separate returns), individuals filing joint returns, heads of households, and estates and trusts. — For taxable years beginning on and after January 1, 2026, the tax imposed by §11-21-3 of this code on the West Virginia taxable income of every individual (except married individuals filing separate returns); every individual who is a head of a household in the determination of his or her federal income tax for the taxable year; every husband and wife who file a joint return under this article; every individual who is entitled to file his or her federal income tax return for the taxable year as a surviving spouse; and every estate and trust (except non-grantor trusts administered by licensed private trust companies created pursuant to the provisions of §31I-1-1 et seq. of this code) shall be determined in accordance with the following table:
If the West Virginia taxable
income is: The tax is:
Not over $10,000 2.11% of the taxable income
Over $10,000 but not over $25,000 $211 plus 2.81% of excess over $10,000
Over $25,000 but not over $40,000 $632.50 plus 3.16% of excess over $25,000
Over $40,000 but not over $60,000 $1,106.50 plus 4.22% of excess over $40,000
Over $60,000 $1,950.50 plus 4.58% of excess over $60,000
(b) Rate of tax on married individuals filing separate returns. — For taxable years beginning on and after January 1, 2026, in the case of husband and wife filing separate returns under this article for the taxable year, the tax imposed by §11-21-3 of this code on the West Virginia taxable income of each spouse shall be determined in accordance with the following table:
If the West Virginia taxable
income is: The tax is:
Not over $5,000 2.11% of the taxable income
Over $5,000 but not over $12,500 $105.50 plus 2.81% of excess over $5,000
Over $12,500 but not over $20,000 $316.25 plus 3.16% of excess over $12,500
Over $20,000 but not over $30,000 $553.25 plus 4.22% of excess over $20,000
Over $30,000 $975.25 plus 4.58% of excess over $30,000
(c) Rate of tax on non-grantor trusts administered by licensed private trust companies. – In the case of non-grantor trusts administered by licensed private trust companies created pursuant to §31I-1-1 et seq. of this code, there is no tax imposed by §11-21-3 of this code.
(d) Effect of rates on nonresident composite and withholding obligations. — Notwithstanding any provision of this article to the contrary, for taxable years beginning on and after the date specified in subsection (e) of this section, whenever the words "six and one-half percent" appear in §11-21-51a, §11-21-71a, §11-21-71b, or §11-21-77 of this code, with relation to a tax return of, or the tax rate imposed on income of individuals, individuals filing joint returns, heads of households, and estates and trusts (except non-grantor trusts administered by licensed private trust companies created pursuant to the provisions of §31I-1-1 et seq. of this code), the stated percentage shall be changed to 4.58 percent.
(e) Applicability of this section. — The provisions of this section shall be applicable in determining the rates of tax imposed by this article and shall apply for all taxable years beginning on and after January 1, 2026, and shall be in lieu of the rates of tax specified in §11-21-4i of this code.”.
ADOPTED
REJECTED