CHARLESTON, W.Va. — A 71-year-old West Virginia tax goes off the books today.
The 1-cent beverage tax, more commonly known as the pop tax, is no more. State lawmakers voted in the 2022 regular legislative session to remove the tax and its $14 million in annual funding.
The pop tax was first approved in 1951 with the goal of funding the construction of the WVU Medical School in Morgantown. The med school was long ago built but the tax stayed on as WVU got used to the money it generated.
“It’s really hard to get a tax off,” state Revenue Secretary Larry Pack admitted recently. “Every once in a while the taxpayers get a win and this is a win for the taxpayers of West Virginia.”
WVU is still getting its $14 million.
When lawmakers voted to eliminate the tax they also came up with a way to continue the funding with money from the state Insurance Premium Tax. It will now funds WVU health sciences with $14 million, Marshall University Joan C. Edwards School of Medicine with $5.5 million and the Osteopathic School of Medicine with $3.9 million.
Funds from that tax have gone to the state’s general revenue account.
Then WVU Vice President Rob Alsop said at the time the replacement revenue “helps get us comfortable and achieves their objective.”
The Insurance Premium Tax funding will represent about 40% of WVU’s state funding for its health sciences programs.
It’s the first time Marshall and WVSOM are getting dedicated money.
“The medical schools are made whole,” Pack said.
Happy with the change
The West Virginia Beverage Association is glad to see the tax disappear. General Counsel Will Swann said this is what they’ve been wanting for a long time.
“Repealing the beverage tax is a win for West Virginia’s working families, small businesses and the state economy,” Swann told MetroNews. “This tax unfairly raised prices on hundreds of everyday beverages for 71 years.”
The tax has come with administrative costs. Beverage companies like Coca-Cola Consolidated, PepsiCo, Keurig Dr Pepper and ABARTA Coca-Cola have had to foot the bill to affix tax crowns and stamps on their products.
Swann said the lifting of the tax also makes West Virginia beverage companies more competitive. None of the surrounding states have had a beverage tax and with the West Virginia elimination only Arkansas is left.
There’s already been about $32 million in new investment in West Virginia with the tax being taken off the books including new PepsiCo facilities in Ona and Teays Valley.
Pack and Swann both credit state Tax Commissioner Matt Irby and staff for helping work through the process of removing the tax.
Finally gone
Pack said removing the tax came up for discussion several times at the statehouse during the parts of eight decades that it was in effect but it never happened until now.
“That was a goal of a lot of previous legislators and previous governors but Gov. Justice and this current legislature finally got it done and they all should be congratulated,” Pack said.
Exactly how the removal of the 1-cent tax will impact prices remains to the seen. There’s been a process in place on how its collected and submitted to the state. There will be $14 million that was collected that will no longer will be.