WEST virginia legislature
2018 regular session
House Bill 4213
By Delegates Phillips, Blair, Criss, lane, McGeehan, Marcum, Gearheart and Maynard
[Introduced January 19,
to the Committee on Energy then Finance.]
A BILL to amend and reenact §11-13A-3 of the Code of West Virginia, 1931, as amended, reducing the severance tax on coal to two percent; making it effective March 31, 2018.
Be it enacted by the Legislature of West Virginia:
ARTICLE 13A. SEVERANCE AND BUSINESS PRIVILEGE TAX ACT.
§11-13A-3. Imposition of tax on privilege of severing coal, limestone or sandstone, or furnishing certain health care services, effective dates therefor; reduction of severance rate for coal mined by underground methods based on seam thickness.
(a) Imposition of tax. — Upon every person exercising the privilege of engaging or continuing within this state in the business of severing, extracting, reducing to possession, and producing for sale, profit, or commercial use coal, limestone, or sandstone, or in the business of furnishing certain health care services, there is hereby levied and shall be collected from every person exercising such privilege an annual privilege tax.
(b) Rate and measure of
tax. — Subject to the provisions of subsection (g) of this section, the tax
imposed in subsection (a) of this section shall be five percent of the gross
value of the natural resource produced or the health care service provided, as
shown by the gross income derived from the sale or furnishing thereof by the
producer or the provider of the health care service, except as otherwise
provided in this article: Provided, That effective March 31, 2018, the tax rate imposed
by this subsection on the gross value of coal produced is two percent. In the case of coal,
this five percent the
rate of tax includes the thirty-five one hundredths of one percent additional
severance tax on coal imposed by the state for the benefit of counties and
municipalities as provided in §11-13A-6 of this code.
(c) “Certain health care services” defined. — For purposes of this section, the term “certain health care services” means, and is limited to, behavioral health services.
(d) Tax in addition to other taxes. — The tax imposed by this section shall apply to all persons severing or processing, or both severing and processing, in this state natural resources enumerated in subsection (a) of this section and to all persons providing certain health care services in this state as enumerated in subsection (c) of this section and shall be in addition to all other taxes imposed by law.
(e) Effective date. — This section, as amended in 1993, shall apply to gross proceeds derived after May 31, 1993. The language of this section, as in effect on January 1, 1993, shall apply to gross proceeds derived prior to June 1, 1993 and, with respect to such gross proceeds, shall be fully and completely preserved.
(f) Reduction of severance tax rate. — For tax years beginning after April 11, 1997, any person exercising the privilege of engaging within this state in the business of severing coal for the purposes provided in subsection (a) of this section shall be allowed a reduced rate of tax on coal mined by underground methods in accordance with the following:
(1) For coal mined by underground methods from seams with an average thickness of thirty-seven inches to forty-five inches, the tax imposed in subsection (a) of this section shall be two percent of the gross value of the coal produced. For coal mined by underground methods from seams with an average thickness of less than thirty-seven inches, the tax imposed in subsection (a) of this section shall be one percent of the gross value of the coal produced. Gross value is determined from the sale of the mined coal by the producer. This rate of tax includes the thirty-five one hundredths of one percent additional severance tax imposed by the state for the benefit of counties and municipalities as provided in §11-13A-6 of this code.
(2) This reduced rate of tax applies to any new underground mine producing coal after April 11, 1997, from seams of less than forty-five inches in average thickness or any existing mine that has not produced coal from seams forty-five inches or less in thickness in the one hundred eighty days immediately preceding the effective date of this subsection.
(3) The seam thickness shall be based on the weighted average isopach mapping of actual coal thickness by mine as certified by a professional engineer.
(g)(1) Termination and expiration of the behavioral health severance and business privilege tax. — The tax imposed upon providers of health care services under the provisions of this article shall expire, terminate and cease to be imposed with respect to privileges exercised on or after July 1, 2016. Expiration of the tax as provided in this subsection shall not relieve any person from payment of any tax imposed with respect to privileges exercised before the expiration date.
(2) Refunds made. — The Tax Commissioner will issue a requisition on the treasury for any amount finally, administratively, or judicially determined to be an overpayment of the tax terminated under this subsection. The Auditor shall issue a warrant on the Treasurer for any refund requisitioned under this subsection payable to the taxpayer entitled to the refund, and the Treasurer shall pay the warrant out of the fund into which the amount refunded was originally paid.
NOTE: The purpose of this bill is to reduce the severance tax on coal to two percent. The bill makes the effective March 31, 2018.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.