HB712: Coal severance tax; codifies manner in which it is calculated.
Be it enacted by the General Assembly of Virginia:
1. That § 58.1-3712 of the Code of Virginia is amended and reenacted as follows:
§ 58.1-3712. Counties and cities authorized to levy severance tax on coal and gases.
A. The governing body of any county or city may levy a license
tax on every person engaging in the business of severing coal or gases from the
earth. Such In cases where the
severer is a contract miner, such tax shall not exceed one percent of the gross
receipts received by the unrelated contract miner from the contracting
entity. In cases where the severer is not a contract miner, such
tax shall be at a rate not to exceed one percent of the gross receipts from the
sale of coal or gases severed within such county. Such gross receipts shall be
the fair market value measured at the time such coal or gases are utilized or
sold for utilization in such county or city or at the time they are placed in
transit for shipment therefrom, provided that if the tax provided herein is
levied, such county or city cannot enact the provisions of § 58.1-3286 relating
to a tax on gross receipts. In calculating the fair market value, no person
engaging in the production and operation of severing gases from the earth in
connection with coal mining shall be allowed to take deductions, including but
not limited to, depreciation, compression, marketing fees, overhead,
maintenance, transportation fees, and personal property taxes.
B. Notwithstanding any other provision of this section or law, for purposes of calculating the fair market value of gases severed in Buchanan County, except as otherwise provided in a settlement agreement regarding the calculation of fair market value, including deductions for transportation and compression costs, between the County and the taxpayer, no person engaging in the production and operation of severing gases from the earth in connection with coal mining shall be allowed to take deductions, including but not limited to, depreciation, compression, marketing fees, overhead, maintenance, transportation fees, and personal property taxes.
C. Any county or city enacting a license tax under this section may require producers of coal or gas and common carriers to maintain records and file reports showing the quantities of and receipts from coal or gases which they have produced or transported.