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Natural gas processors find W.Va. tax loophole

MOUNDSVILLE, W.Va. – Williams Energy, Blue Racer Midstream and MarkWest Energy spent nearly $900 million in Marshall County during the last tax year on their natural gas processing plants, but those same plants are taxed at only a fraction of that amount, county officials said.

Marshall County Assessor Chris Kessler and Commissioner Robert Miller believe a 2011 bill passed by the West Virginia Legislature intended to entice a company to build a multi-billion dollar ethane cracker plant in the state may be allowing these companies to pay far less property taxes than they otherwise would for these processing plants, de-ethanizer units and fractionation facilities.

Under the bill, any new plant built in the state is eligible for tax credits that, in reality, bring the overall tax burden to only 5 percent of a plant’s value for the first 10 years it is operating.

Under the legislation, only $45 million of the $900 million – 5 percent – is taxable.

“I believe a 95 percent tax break on these is excessive,” Kessler said. “That legislation was supposed to attract a $1 billion ethane cracker. But the language allows companies to take the tax credit with just a $20 million investment.”

Because of the tax credits approved by the West Virginia State Tax Department, Kessler said Marshall County overall will not realize $10 million next year in property taxes that it otherwise would have received, based on the county’s assessed values – $2 million that would have gone into the county’s general fund and $8 million that would have gone to Marshall County Schools.

“We didn’t realize this was happening until Chris reviewed the property taxes,” Miller said. “That is $10 million this year that we are not going to get. And because it appears there will be even more construction next year, we will be losing even more that we should be getting…”

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