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The decades-old Pop Tax has collected its last revenue

CHARLESTON, W.Va. — A 71-year-old West Virginia tax will be wiped off the books today.

The tax is stamped on the bottom of each can. (Photo/MetroNews)

The 1-cent beverage tax, better known as the pop tax, is no more. State lawmakers voted to eliminate the tax and its $14 million annual funding in the 2022 regular legislative session.

The Pop Tax was first approved in 1951 with the goal of funding the construction of the WVU Medical School in Morgantown. The medical school was built long ago, but the tax remained because WVU had become accustomed to the money it brought in.

“It’s really hard to pass a tax,” state Treasurer Larry Pack recently admitted. “Every once in a while, taxpayers can win, and this is a victory for West Virginia taxpayers.”

WVU still gets its $14 million.

When lawmakers voted to repeal the tax, they also found a way to continue funding it with money from the state insurance tax. That tax now provides $14 million for WVU’s health sciences, $5.5 million for Marshall University’s Joan C. Edwards School of Medicine and $3.9 million for the Osteopathic School of Medicine.

The funds from this tax flowed into the general revenue account of the state.

Larry Pack

Then-WVU Vice President Rob Alsop said at the time that the replacement revenue “helps us feel comfortable and achieve our goal.”

Funding from the insurance tax will provide approximately 40% of WVU’s state funding for its health sciences programs.

This is the first time Marshall and WVSOM have received special funding.

“The medical schools have been restored,” said Pack.

Happy with the change

Will Swann

The West Virginia Beverage Association is happy to see the tax repealed. General Counsel Will Swann said this is what they have wanted for a long time.

“Eliminating the beverage tax is a win for West Virginia’s working families, small businesses and the state’s economy,” Swann told MetroNews. “For 71 years, this tax has unfairly raised the prices of hundreds of everyday beverages.”

There are administrative costs associated with the tax. Beverage manufacturers such as Coca-Cola Consolidated, PepsiCo, Keurig Dr Pepper and ABARTA Coca-Cola had to bear the costs of placing tax crowns and stamps on their products.

Swann said repealing the tax also increases the competitiveness of West Virginia’s beverage manufacturers. None of the surrounding states had a beverage tax, and with the repeal in West Virginia, only Arkansas remains.

In West Virginia, the tax repeal has already resulted in about $32 million in new investments, including in new PepsiCo plants in Ona and Teays Valley.

Pack and Swann both credit state Tax Commissioner Matt Irby and his staff for helping to eliminate the tax.

Finally gone

Pack said repealing the tax has been discussed in the state legislature several times during the eight decades it has been in effect, but has never come to fruition.

“This has been the goal of many past legislators and governors, but Governor Justice and the current legislature have finally accomplished it and they should all be congratulated,” Pack said.

It remains to be seen exactly how the abolition of the 1 cent tax will affect prices. There is a process for how the tax is collected and paid to the state. 14 million dollars that were previously collected will no longer be collected.

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