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West Virginia considers increasing, broadening sales tax


 West Virginia's governor seeks higher taxes to fill a budget gap.

Like a number of states, West Virginia is facing an impressive budget gap. To fill it, Governor Earl Ray Tomblin (D) called a special session and presented legislators with proposals to generate more revenue. They include increasing the state sales and use tax rate, increasing and broadening tobacco taxes, and eliminating the state sales and use tax exemption for telecommunication services.

State rate increase.

The West Virginia state sales and use tax rate is currently 6%. S.B. 1004 seeks to increase that rate to 7% (the rate for gasoline and special fuel sales would remain 5%). If approved, the rate increase would take effect July 1, 2016.

Telecommunications

S.B. 1003 seeks to subject telecommunications service and ancillary services to consumers sales and service tax and use tax beginning July 1, 2016.

Tobacco products

H.B.103 and S.B. 1005 seek to increase the tax on cigarettes and tobacco products other than cigarettes. Beginning July 1, 2016, the rate of excise tax imposed on the sale of cigarettes would be $1.00 per 20 cigarettes. Other tobacco products would be taxed “at the rate equal to 12 percent of the wholesale price.”

In addition, it seeks to levy tax on e-cigarette liquid at the rate of 7.5 cents per milliliter or fraction thereof.

Higher tax rates are not the only idea up the governor’s sleeves. He is also floating legislation that would authorize him to furlough state employees and pay certain obligations in the event of fiscal emergency (S.B. 1006).

Stay on top of sales tax rates and policy changes in West Virginia and other states. Learn how sales tax software (SaaS) works.


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.