Tobacco Tax Increase Returns to West Virginia Budget Proposal

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It’s back: a proposal to raise the tax on tobacco products including premium cigars in West Virginia, as the state legislature returns for an extended session to come to an agreement on the 2016-17 budget.

SB 1012 was approved by the state Senate on Friday, which includes a 65-cent per pack increase on cigarettes as well as an increase in the tax on other tobacco products (OTP) from 7 percent to 12 percent of the wholesale price. E-cigarettes would also be subject to the 12 percent tax rate.

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The bill passed by a 24-7 vote with three absentees. It now heads to the state House of Delegates, where similar bills have been met with defeats in recent weeks.

The first defeat of the increase came back in March and included a $1 per pack increase on cigarettes, with a second–and somewhat shocking–defeat coming in May as a 45-cent per pack increase was proposed along with the OTP increase. The reason? House Democrats didn’t think the tax was enough. When they partnered with a group of staunch anti-tax Republicans, the bill failed 44-55.

Then on June 3, the house voted against the increase again.

The legislature is looking for ways to close a $270 million budget shortfall, and Gov. Earl Ray Tomblin has rejected the idea of using the state’s rainy day fund as a primary means to do so. The tobacco tax increase would generate approximately $100 million in revenue according to state estimates, and has the support of the governor, who has called on the House to approve it.

The state is quickly approaching a July 1 shutdown if a budget doesn’t get approved. The House convened at 2 pm on Saturday, though no action had been taken as of yet, and some speculate it won’t make it to the floor for consideration until Sunday.

Should the OTP tax eventually get passed, a cigar with an MSRP of $9.50 would go from costing $10.17 to $10.64 by halfwheel estimates.

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I strive to capture the essence of a cigar and the people behind them in my work – every cigar you light up is the culmination of the work of countless people and often represents generations of struggle and stories. For me, it’s about so much more than the cigar – it’s about the story behind it, the experience of enjoying the work of artisans and the way that a good cigar can bring people together. In addition to my work with halfwheel, I’m the public address announcer for the Colorado Rockies and Arizona Diamondbacks during spring training, as well as for the Salt River Rafters of the Arizona Fall League, the WNBA's Phoenix Mercury and the Arizona Rattlers of the Indoor Football League. I also work in a number of roles for MLB.com, plus I'm a voice over artist. I previously covered the Phoenix and national cigar scene for Examiner.com, and was an editor for Cigar Snob magazine.

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