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Tobacco Tax Likely on Table for 2016 Session

Perry Bennett
West Virginia Legislative Photography
House Finance Chair Eric Nelson and Senate President Bill Cole during the Joint Select Committee on Tax Reform.

As lawmakers continue to discuss ways to reform the state's tax code, Tuesday's meeting of the Joint Select Committee on Tax Reform focused on one tax increase that may be palatable for members of the state Legislature, the tobacco tax.

West Virginia last increased its tobacco tax in 2003 to the current 55 cents per pack which, according to the national Tax Foundation, is the 8th lowest in the nation.

Tax Foundation Policy Analyst Jared Walczak told members of the committee while the state does have one of the highest smoking rates in the nation at 23 percent, an increase in the tax is not necessarily a sustainable source of revenue into the future.

"The first year is likely to be a watermark or close to it," he told the committee.

Walczak said the state's tobacco tax revenues show an increase in 2004, the year after the state's most previous tax increase. Since, Walczak said revenues have leveled. 

"There’s a lot of people talking about the tobacco tax," House Finance Chair Eric Nelson said Tuesday. "I think now is the time to look at many things and that’s one of them."

Senate Minority Leader Jeff Kessler agreed. Kessler introduced a bill to increase the tax during the 2015 session and said he plans to propose another in 2016 with a dedicated source.

“I think we need to raise [the tax] and put some of that money into substance abuse programs in our local communities," he said. "Every county needs a substance abuse treatment facility and centers and counselors to help these kids get off it.”

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