feb 23, 2026 · fiscal policy · tax reform

West Virginia Raises Vapor Taxes to Fund Income Tax Cut Plan

Senate passes 10% income tax reduction (SB 392) with revised e‑cigarette excise tax to help offset revenue gap

Key takeaways

• 10% income tax cut: WV Senate passes SB 392, reducing personal income tax rates ~10% retroactive to Jan. 1, 2026.
• Vapor tax overhaul: replaces flat 7.5¢/ml tax with a tiered system.
• Closed systems: taxed at $1.20 per unit (cartridges/pods).
• Open systems: refillable products taxed at 25¢ per milliliter.
• Expected revenue: vapor tax changes projected to generate ~$22 million annually.
• Income cut scale: when fully implemented, tax reduction estimated at $250 million.

According to The Weirton Daily Times, the West Virginia Senate passed Senate Bill 392 (SB 392) by a vote of 28‑4, approving Governor Patrick Morrisey's proposed 10% personal income tax cut while raising the excise tax on e‑cigarettes and vapor products as a partial revenue offset.

Under the bill, personal income tax rates would be reduced by approximately 10%, retroactive to January 1. When fully implemented, the cut is expected to return about $250 million to taxpayers.

To help fill the resulting budget gap, the Senate Finance Committee revised the current vapor tax structure. West Virginia previously imposed a flat tax of 7.5¢ per milliliter on all e‑cigarette products. The new system is tiered:

Senate Finance Committee Chairman Jason Barrett said including the vapor tax adjustment provides a partial revenue offset for the tax cut while creating negotiating room as the bill moves to the House.

However, the House Finance Committee's budget version has not yet incorporated the 10% reduction. House Finance Chair Vernon Criss has expressed concerns about accelerating the cut before existing economic growth triggers are met, warning of potential strain on fiscal stability.

Former Senate Finance Chair Eric Tarr also voted against the bill, citing risks of reducing revenue by ~$250 million while budget pressures remain. He argued that if the cut outpaces the state's economic growth, future legislatures might be forced to raise taxes or cut spending.

Some Democratic lawmakers opposed the plan as well, stating that a large tax cut is imprudent amid growing needs in education and child welfare.

Supporters maintain that the vapor tax adjustment is a measured revenue measure within the broader tax relief framework, balancing taxpayer relief with fiscal discipline.

The bill has now been sent to the West Virginia House of Delegates for consideration.

Source: 2Firsts, February 23, 2026 · based on reporting by The Weirton Daily Times · Cover image: State Senator Eric Tarr (former Senate Finance Chair) / WV Legislative Photography