By Steven Allen Adams, The Parkersburg News and Sentinel
CHARLESTON, W.Va. — A delegate from a county hit hardest by a mistake last year by the West Virginia Tax Division accuses state tax officials of “negligence” during debate on a bill to remove a deadline that would keep a controversial natural gas property tax valuation formula in place.
The House passed House Bill 4850 in a 71-25 vote Monday, with a bipartisan group of lawmakers from eight natural gas producing counties opposing the bill. It now heads to the state Senate where a similar bill — Senate Bill 395 — was moved to the Senate Rules Committee earlier that same day.
Both bills would remove a sunset provision for a formula to determine the value of personal property that produces oil, natural gas and natural gas liquids. But implementation of that formula by the state Tax Division has been plagued by issues since 2022, including a mistake that caused eight natural gas-producing counties to be shorted by more than $30 million in tax collections.
“The story was ‘whatever you do, don’t say it was the mistake,’” said House Judiciary Committee Vice Chairman David Kelly, R-Tyler. “Well, ladies and gentlemen, what else can it be but a mistake? And at that point, it was more than a mistake. It was negligence.”
House Bill 4336, passed by the Legislature in 2022, requires the state Tax Division to calculate oil and natural gas property valuations using an income-based approach based on what the value of the interest would be if sold at market value. But this new formula has a sunset of July 1, 2025, requiring the Legislature to either keep the new formula in place or develop a new formula by that deadline.
“The current methodology would not change,” said House Finance Committee Chairman Vernon Criss, R-Wood. “The bill merely makes the prior changes permanent. A failure to act will lead to the oil and gas portion of the statute becoming unenforceable.”