Bill Text: WV HB2718 | 2017 | Regular Session | Introduced
Bill Title: Relating generally to severance taxes imposed on the privilege of producing coal for sale
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2017-02-27 - To House Energy [HB2718 Detail]
Download: West_Virginia-2017-HB2718-Introduced.html
WEST virginia Legislature
2017 regular session
Introduced
House Bill 2718
By Mr. Speaker (Mr. Armstead) and Delegate Miley (By Request of the Executive)
[Introduced
February 27, 2017; Referred
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, relating generally to severance taxes imposed on the privilege of producing coal for sale, profit or commercial use; specifying effective date; and making technical corrections.
Be it enacted by the Legislature of West Virginia:
That §11-13A-3 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:
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 the
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 is 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. In the case of coal, this five
percent 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 section six of this article.
(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 applies
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 is in addition to all
other taxes imposed by law.
(e) Effective date.
— This section, as amended in 1993, shall apply applies to gross
proceeds derived after May 31, 1993. The language of this section, as in effect
on January 1, 1993, shall apply applies to gross proceeds derived
prior to June 1, 1993 and, with respect to such those gross
proceeds, shall be fully and completely preserved.
(f) Reduction of
severance tax rate for thin seam coal. — For tax years beginning
after the effective date of this subsection, 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 is
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 is 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 is 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 section six of this article.
(2) This reduced rate of tax applies to any new underground mine producing coal after the effective date of this subsection, 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 ceases
with respect to privileges exercised on or after July 1, 2016. Expiration of
the tax as provided in this subsection shall does 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 shall 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.
(h) Tiered severance tax rates on coal. – The rate of tax on the privilege of engaging or continuing within this state in the business of severing, extracting, reducing to possession, and producing coal for sale, profit or commercial use, except for thin seam coal which shall continue to be taxed at the rates specified in subsection (f) of this section, is:
(1) For all tons of metallurgical coal produced on and after July 1, 2017:
If gross income from sale of coal
during the reporting period is: Rate of tax:
Less than $50 per ton 3.5%
$50 or more but less than $55 per ton 4%
$55 per ton but less than $60 per ton 4.5%
$60 per ton but less than $75 per ton 5%
$75 per ton but less than $85 per ton 5.5%
$85 per ton but less than $100 per ton 6%
$100 per ton but less than $125 per ton 7%
$125 per ton but less than $150 per ton 8%
$150 per ton but less than $175 per ton 8.5%
$175 per ton but less than $200 per ton 9%
$200 per ton or more 10%
These rates of tax include 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 section six of this article. The rate of tax for each reporting period shall be determined by dividing the gross income of the taxpayer from sales of all coal during the reporting period, exclusive of sales of thin seam coal, by the tons of all coal sold by the taxpayer during the reporting period but not including tons of thin seam coal; and.
(2) For all tons of steam coal produced on and after July 1, 2017:
If gross income from sale of coal
during the reporting period is: Rate of tax:
Less than $30 per ton 3.5%
$30 or more but less than $35 per ton 4%
$35 per ton but less than $40 per ton 4.5%
$40 per ton but less than $50 per ton 5%
$50 per ton but less than $55 per ton 5.5%
$55 per ton but less than $60 per ton 6%
$60 per ton but less than $65 per ton 6.5%
$65 per ton but less than $70 per ton 7%
$70 per ton but less than $80 per ton 7.5%
$80 per ton but less than $90 per ton 8%
$90 per ton but less than $100 per ton 9%
$100 per ton or more 10%
These rates of tax include 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 section six of this article. The rate of tax for each reporting period shall be determined by dividing the gross income of the taxpayer from sales of all coal during the reporting period, exclusive of sales of thin seam coal, by the tons of all coal sold by the taxpayer during the reporting period but not including tons of thin seam coal.
NOTE: The purpose of this bill is to impose that severance tax on the privilege of producing coal at graduated rates depending upon the gross income of the taxpayer derived from sales of coal during the reporting period divided by tons of coal produced and sold by the taxpayer during the reporting period. Thin seam coal is excluded from both computations.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.
