Saturday, November 20, 2010

Taxing the Working Interest

On Friday Nov. 19, 2010, the WV Assessors Association presented a resolution to the West Virginia Property Valuation, Training and Procedures Commission asking it to order the State Tax Commissioner to amend the W.Va. Tax Commissioner’s valuation plan for the appraisal of industrial property. The amendment included a detailed methodology for the appraisal of chattel real interests in producing mined mineral properties, which includes coal, for the tax year 2011 and subsequent tax years. The resolution was tabled, but the Commission expects to review this issue in the future...and it will be a topic before the 2011 session of the W.Va. Legislature. The effect of the resolution would be to value, assess and then tax as personal property mined minerals including coal from producing mines as chattel real property. The working interest in a producing natural gas well is currently taxed as chattel real property. The Assessors Association believes this is and has been statutorily and constitutionally required by West Virginia law to ensure fair and equitable taxation. Nick Casey of LGCR participated in the Assessors Association’s presentation to the Commission.