WVPA Sharing

West Virginia Tax Department to get another chance on natural gas property tax rule

by Steven Allen Adams, Parkersburg News and Sentinel

CHARLESTON, W.Va. — A bill considered by the House Finance Committee on Monday afternoon would give the State Tax Department another try at developing a rule for determining tax assessments for natural gas-producing property in West Virginia.

The committee recommended House Bill 4162 for passage, authorizing the State Tax Department to promulgate a legislative rule relating to valuation of property that produces oil, natural gas, and natural gas liquids. It also states the legislative rule previously filed by the State Tax Department is not authorized.

HB 4162 comes nearly one month since the West Virginia Legislature’s Rule-Making Review Committee moved to not approve an earlier legislative rule submitted by the State Tax Department last summer regarding assessments of natural-gas producing property.

House Bill 2581, passed during the 2021 legislative session, required the State Tax Commissioner to develop a revised methodology to value oil and natural gas properties based on the fair market value based on a yield capitalization model applied to gross royalty payments for royalty interest to net proceeds once royalties and annual operating costs are subtracted from gross receipts.

Instead, the emergency rule and the draft rule developed by the State Tax Department lowered the capitalization rate, eliminated the use of a three-year weighting, and left it up to the State Tax Department to use its own reasonable standard, which is undefined in the rule itself instead of the actual revenues and expenses of the producer. …

Read more: https://www.newsandsentinel.com/news/business/2022/02/west-virginia-tax-department-to-get-another-chance-on-natural-gas-property-tax-rule/

Comments are closed.

Subscribe to Our Newsletter