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Low W.Va. cigarette tax has upside, report indicates

BECKLEY, W.Va. — Even with major tobacco-growing neighbors, West Virginia’s low cigarette tax has helped the state avoid significant revenues lost to smuggling, according to a recent report.

The Tax Foundation found that West Virginia ranked 42nd in cigarette smuggling thanks to its 55 cents a pack tax rate.

While West Virginia neighbors Kentucky and Virginia may have low state taxes on smokes, local government taxes increase the cost of a pack of cigarettes significantly.

In Alexandria, Va., the current combined state and local tax rate is $1.10 a pack. A smoker walking into a 7-Eleven on South Glebe Road in Alexandria would pay nearly $7 for a pack of Marlboro Reds on Monday, according to a clerk answering the telephone. At the Little General on Robert C. Byrd Drive, the same brand sells for $5.31, a clerk said.

The West Virginia Department of Revenue did not directly answer the question how much the state loses in cigarette taxes due to smuggling. One state tax official said West Virginia “loses very few funds” annually, because of the low cigarette tax imposed.

“On a net basis, the state sells more cigarettes to residents from other states than the state loses in sales from elsewhere to residents of West Virginia,” said Mark Muchow, deputy secretary of revenue.

Currently, he said, the state collects approximately $95 million in cigarette taxes and another $7 million in tobacco-related products.

The Tax Foundation estimates about 20 percent of cigarette sales in West Virginia are to residents of other states…


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