SO Many Tax Cuts to Industry

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.

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  1. Tax cuts for out of state businesses is a tired old attempt to improve West Virginia’s economy by giving away their citizens’ financial resources to corporations which ship their profits out of state and leave their clean up and mitigation expenses for the local populace. I’ve always heard that the definition of insanity is doing the same thing over and over and expecting different results. The latest giveaway proposal in SJR9 to phase out business and inventory taxes fits this description exactly. Our state administration has been trying this method for economic development for over 100 years.

    Did we learn nothing from the 2014 water crisis? Since the Bayer explosion in 2008 and the water poisoning in 2014, WV has continued to lose population. People don’t want to move to WV because of the polluted air and water. The two crises I mention received nationwide publicity. Of course, people are reluctant to move to an area which puts their health at risk. Instead of giving away our tax receipts we should be using those funds to clean up our environment and improve our educational system. Then we wouldn’t have to pay corporations to come to WV.

    Meanwhile, our WV Economic Development Authority continues to throw our tax dollars at polluting industries, like Rockwool in the Eastern Panhandle. The Payment in Lieu of Taxes Agreements (PILOT) are given out with no follow up to see if there is any return on investment. My observation tells me that not only is there no benefit for the West Virginia economy but that frequently the liabilities these corporations leave behind are a burden on taxpayers.

    I left the Kanawha Valley 10 years ago (after the Bayer explosion) and moved to the Eastern Panhandle because of my desire to live in an area with clean air and water. Now our geniuses in the West Virginia Economic Development Authority are proposing we pay a Danish Corporation, Rockwool, to come to our Eastern Panhandle and pollute the Shenandoah Valley.

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