The bill, formally known as Senate Bill 705, would have lowered the severance for both industries by 1% per year for the next two fiscal years starting in July 2017, the beginning of the state’s fiscal year. Another reduction from 5% to 3% would have gone into effect in July 2019.
While the Senate passed the proposal last week with a 19-15 vote, the West Virginia House Finance Committee effectively removed it from consideration during the current legislative session and will move forward with an interim study to examine the cuts’ impact, according to West Virginia MetroNews.
SB 705 was first presented to offer some relief to both sectors, which have been beaten up by a depressed market. It also would have made West Virginia more competitive with those nearby states with lower tax rates.
House Finance Chairman Eric Nelson said more time is needed to consider a proposal that would reduce the state’s revenue.
“These taxes, according to that bill, would not have been dropped until fiscal year 2018, so it would have been July 2017,” he said. “What a study does is, it puts much greater emphasis on addressing potentially reducing this tax, helping these industries out, and we can look at that over the next eight months. Then, at the beginning of next session, then, we are handling a tax reduction that can potentially help some industries. Instead of hitting this in the last few days of this session and rushing into something we will second guess later.”
SB 705 is separate from SB 419, which eliminates additional surtaxes of 56 cents per ton of coal and 4.7 cents per thousand cubic foot of gas. Already signed by Gov. Earl Ray Tomblin, the cuts go into effect July 1, or earlier at his discretion.
The full text of SB 705 can be viewed at http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=SB705%20ORG.htm&yr=2016&sesstype=RS&i=705.
