Bill Text: WV HB4439 | 2020 | Regular Session | Introduced
Bill Title: Clarifying the method for calculating the amount of severance tax attributable to the increase in coal production
Spectrum: Moderate Partisan Bill (Republican 9-2)
Status: (Passed) 2020-04-15 - Chapter 335, Acts, Regular Session, 2020 [HB4439 Detail]
Download: West_Virginia-2020-HB4439-Introduced.html
WEST virginia legislature
2020 regular session
Introduced
House Bill 4439
By Delegates Householder, Criss, Butler, Anderson, Rowan, Linville, Graves, Maynard, Barrett and Boggs
[Introduced January 21, 2020; Referred to the Committee on Energy then Finance]
A BILL to amend and reenact §11-13EE-3 of the Code of West Virginia, 1931, as amended, relating to clarifying the method for calculating the amount of severance tax attributable to the increase in coal production at a mine due to new qualifying capital investments.
Be it enacted by the Legislature of West Virginia:
ARTICLE 13EE. COAL SEVERANCE TAX REBATE.
§11-13EE-3. Rebate allowable.
(a) Rebate allowable. ̶ Eligible
taxpayers shall be are allowed a rebate for a portion of state
severance taxes imposed by §11-13A-3 of this code on the privilege of severing,
extracting, reducing to possession and producing coal for sale, profit, or commercial
use that is attributable to the increase in the production of coal that is
attributable to, and the consequence of, the taxpayer’s capital investment in
new machinery, equipment, or improvements to real property used at the coal
mine, or coal preparation and processing facility. The amount of this rebate
shall be determined and applied as hereinafter provided in this article.
(b) Amount of rebate. ̶ The amount of rebate allowable is determined by multiplying the amount of the taxpayer’s capital investment in new machinery, equipment, or improvements to real property directly used in the production of coal at a coal mining operation in this state by 35 percent. The product of this computation establishes the maximum amount of rebate allowable under this article for the capital investment in new machinery, equipment, or improvements to real property.
(c) Application of rebate amount. ̶ The amount of rebate allowable is determined by applying the rebate amount determined in subsection (b) of this section against 80 percent of the state portion of the severance tax paid on the privilege of severing, extracting, reducing to possession, and producing coal for sale, profit, or commercial use that is directly attributable to the increased production of coal at the mine due to taxpayer’s capital investment in new machinery, equipment, or improvements to real property at the mine or coal processing and preparation plant.
(d) The amount of severance
tax attributable to the increase in coal production at a mine due to the
capital investment in new machinery, equipment, or improvements to real
property shall be is determined by comparing: (1) The state
portion of the severance tax due under §11-13A-3 of this code on coal produced
from the mine during calendar year 2018, or if the taxpayer has produced coal
for five years at the mine at which its capital investment in new machinery,
equipment, or improvements to real property are placed in service or use the
average of the state portion of the severance tax due under §11-13A-3 of this
code on coal produced from the mine during the five year period ending on
December 31, 2018, whichever is less, before allowance of any tax credits,
except as provided in §11-13EE-3(e) of this code; and (2) with the state
severance tax due on coal produced at the mine during the then current calendar
year in which the rebate amount is claimed, before allowance for any tax
credits. When the amount in (2) of this section is greater than the amount in subdivision
(1) of this section subsection, the difference is the amount of
state severance tax due to the increase in coal production at the mine that is
attributable to the capital investment in new machinery, equipment, or
improvements to real property: Provided, That when the producer of the
coal operates more than one mine in this state, or is a member of a controlled
or affiliated group that operates one or more coal mines in this state, no
credit shall be is allowed unless the aggregate total coal
production tonnage that qualifies for this rebate from all mines
operated by the taxpayer or by members of the affiliated or controlled group in
this state during the rebate year has increased above the aggregate
total coal production tonnage during the base-year period, which production would
have otherwise qualified for this rebate had that coal been severed after June
7, 2019, and any credit allowed is further limited to 80 percent of the
increase in the aggregate amount of severance taxes paid in the rebate year
when compared to the aggregate amount of severance taxes paid in the base-year
period: Provided, however, That in no case shall may the
severance tax attributable to any mine other than the specific mine at which
capital investment in new machinery, equipment, or improvements to real
property is directly used in a coal mining operation has been placed in service
or use be offset by this rebate.
(e) When the eligible
taxpayer is a new business that has produced coal in this state for two years
before making the capital investment in new machinery, equipment, or
improvements to real property then, for purposes of subdivision (1) in
subsection (d) of this section, the base shall be is the average
amount of state severance tax due under §11-13A-3 of this code on coal produced
in this state during this two-year period.
(f) No rebate shall be
is allowed under this article when credit is claimed under any other
article of this chapter for capital investment in the new machinery, equipment,
or improvements to real property. No credit shall be is allowed
under any other article of this chapter when rebate is allowed under this
article for the capital investment in new machinery, equipment, or improvements
to real property.
NOTE: The purpose of this bill is to further clarify how a taxpayer can meet the requirement that aggregate total coal production from all mines operated by the taxpayer or by members of the taxpayer’s controlled or affiliated group has increased. In determining whether a taxpayer has demonstrated the requisite increase in total coal production, only coal production that would currently qualify for the severance tax rebate shall be included in calculating the taxpayer’s aggregate base-year coal production.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.
