This session, we have been following tax cut after tax cut on both sides of the legislature. A small update on the cuts we’ve been looking at:
655- Relating to valuation of natural resources land property
4957 / 793-Relating to B&O taxes imposed on certain coal-fired electric generating units – This bill omits nearly every coal-fired electric generating unit from B&O taxes, with the exception of Longview.
4966 / 816- Updating North American Industry Classification System code references. This bill creates more tax credits for natural gas.
4019 – Downstream Natural Gas Manufacturing Investment Tax Credit Act of 2020. This is a credit for downstream manufacturing facilities based on how many jobs they create. The amount of credit allowable depends upon the cost of the qualified investment property and the number of new jobs created. The allowable credit is taken over a 10-year period at the rate of one-tenth per year. Unused credit may be carried forward for another 10 years.The bill is written with foresight for manufacturing happening surrounding the Appalachian Storage Hub.
4421-Natural Gas Liquids Economic Development Act. This provides tax credits specifically for the transporters and storers. The bill is written with foresight for the Appalachian Storage Hub.
4439-Clarifying the method for calculating the amount of severance tax attributable to the increase in coal production. This bill allows coal companies to combine metallurgical coal with thermal coal to get an aggregate tonnage to quality for a larger tax credit.
There is ONE bill to raise taxes on Industry: SB 731 – Limiting severance tax break on steam coal. The bill tightens the reduced severance tax rate of 3% to the first 6 million tons of coal, with anything over being taxed at 5%. This bill would mainly only apply to Murray Energy, that mines 35m+ tons of coal. We think this bill is unlikely to pass.
Here’s the BOTTOM LINE about all of these bills: we have NO idea how much money these bills will cost the state and our revenue. West Virginia will continue to lose money by subsidizing these extractive industries.
This post does not touch on the Senate’s gigantic tax plan including the business /inventory property and tax cuts, that are going to be made almost whole with raising the sales tax and tobacco tax, forcing business breaks onto West Virginians.
We highly recommend reading this blog about 2020’s tax cuts by Ted Boettner of the West Virginia Center on Budget & Policy.