(a) Notwithstanding other provisions of this
article, it is hereby declared to be the intent of the Legislature that one
rate of excise tax is applicable to all quantities of cigarettes and another
rate of excise tax is applicable to all tobacco products other than cigarettes
in this state on and after the first day of July, two thousand one, under the
provisions of this article Any cigarette tax stamps on hand or in
inventory on the effective date of a rate change, whether affixed to the
cigarette package, on hand but not affixed to the cigarette package, or stamps
purchased to be affixed by a meter, are considered to have been purchased or
received on the effective date of the change in rate. Any tobacco
products other than cigarettes, on hand or in inventory, on the
effective date of any rate change are hereby considered to have been purchased
or received on the effective date of the change in rate.
(b) Every wholesaler, subjobber, subjobber dealer,
retail dealer and vending machine operator who, on the effective date of any
rate change, has, on hand or in inventory, any tobacco products or cigarette
tax stamps, whether affixed to the cigarette package, on hand but not
affixed to the cigarette package, or stamps purchased to be affixed by a meter,
and upon which the tax has not been paid or upon which the tax or any
portion of the tax has been previously paid, shall take a physical inventory
and shall file a report of the inventory with the Tax Commissioner, in the
format required by the Tax Commissioner, and shall file the inventory
within thirty sixty days after the inventory effective
date of the rate change and shall pay to the Tax Commissioner any
additional tax due under an increased rate within sixty days after the
effective date of the rate change. in accordance with the following
schedule
(1) One -third at the time of filing the report;
(2) One -third not later than sixty days after the
effective date of the rate change; and
(3) One -third not later than ninety days after the
effective date of the rate change.
A discount of four percent shall be allowed on all tax
due for persons who pay additional tax under this section.
(c) Imposition of the tax on tobacco products other
than cigarettes shall be treated as a change in rate on the effective date of
the tax.
(d)
Effective date. - - The amendments to this section enacted in the year 2016
shall be effective on and after April 1, 2016.
§11-17-4b. Levy of
tax on e-cigarette liquid; definitions; rate; inventory; report; payment;
authority of the Tax Commissioner to inspect and examine witnesses;
presumption; bond.
(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 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, which works
in combination with e-liquid to
produce an inhalable product. 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. 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, or e-fluid,
or 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 April 1, 2016, an excise tax is
levied and imposed on sales of e-cigarette liquid at the rate of 7.5¢ 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) The first $2 million in revenues generated by the
increases in the tax contained in subsection (b) of this section and made during
the 2016 Legislative Session, shall be devoted to tobacco cessation efforts at
the Department of Health and Human Resources including, but not limited to,
pharmacological therapies. Any additional funds generated shall be deposited
into the General Revenue Fund.
(d) E-cigarette liquid on hand or in inventory;
effect of rate changes; inventory; report. - -
On April 1, 2016, and on the effective date of any
rate change thereafter, every place of business as defined in this article,
retail dealer, subjobber, vending machine operator or wholesale dealer who has
on hand or in inventory any e-cigarette liquid, shall take a physical inventory
thereof, and shall file a report of the inventory with the Tax Commissioner, in
the format required by the Tax Commissioner, and shall file the report of the
inventory, and pay the tax due within sixty days after the effective date of
the rate imposition or rate change. Imposition of the tax on sales of e-cigarette
liquid shall be treated as a change in rate on the effective date of the tax.
(e) How tax paid; invoice required; reports
required; due date; records to be kept. - -
(1) The tax imposed in this section on e-cigarette
liquid shall be paid using an invoice method prescribed by the Tax
Commissioner.
(2) Contents of delivery ticket or invoice. - -
Unless otherwise permitted, in writing, by authority of 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, quantity in milliliters, and price of
each e-cigarette liquid in a cartridge, apparatus, container or other device
delivered in this state, or, 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;
(D) The amount of tax imposed by this article. 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
(E) Any other information required by the Tax
Commissioner.
(3) Reports and payments due date. - - On or before
the fifteenth day of each month, manufacturers, importers, every place of
business as defined in this article, retail dealers, subjobbers, 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.
(4) 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 section nineteen -a of this article.
(5) 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.
(f) 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) In addition to the Tax Commissioner’s powers set
forth in article ten of this chapter, 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) 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 subjobber this state. A wholesale dealer may sell tax paid e-cigarette
liquid only to another wholesaler or a retail dealer or subjobber in this
state. No person may purchase nontaxed e-cigarette liquid from any seller not
approved by the Tax Commissioner.
(4) 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.
(g) Bond. - - The Tax Commissioner may
require wholesalers, subjobbers 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.
(h) Administration and enforcement. - - The
provisions of this article and articles nine and ten of this chapter 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.
(i) Criminal sanctions. - - The criminal
sanctions imposed in section nineteen-a of this article 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 section nineteen-a of
this article, the words “container
of tobacco products” shall be
interpreted to mean and include the words “container of tobacco products or e-cigarette
liquid.”
NOTE: The purpose of this bill is to increase the
excise tax on cigarettes and tobacco products, to impose tax resulting from a
rate change on inventories, to specify due dates for payment of tax resulting
from a rate change on cigarette stamps, to levy a tax upon e -cigarette liquid,
to provide for the administration and enforcement of the tax on e-cigarette
liquid, all effective April 1, 2016 and to dedicate a portion of the revenues
generated to the tobacco cessation efforts of the Department of Health and
Human Resources.
Strike -throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.
WEST virginia Legislature