KING COAL WANTS SEVERANCE TAX ABOLISHED

(09/20/2005)

If coal companies prevail in their legal challenge to have taxes on exported coal ruled unconstitutional, West Virginia would be out a lot of money. At stake is at least $360 million, plus interest, let alone future income the state would collect. West Virginia would have to pay it back. Every West Virginia county would give up a funding source. In oral arguments scheduled for the state Supreme Court in Huntington today, attorneys for the coal companies will try to persuade the justices to throw out a Kanawha County Circuit Court ruling that said the taxes were legal. The coal companies argue that the tax on coal destined for export violates the Import-Export clause of the US Constitution, which prohibits states from imposing tariffs or duties on imports or exports. Attorneys for the state Tax Department want the justices to dismiss the idea that federal laws prohibit the severance tax, which is generally calculated at a rate of five percent of the sales price.

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