WV SUPREME COURT UPHOLDS COAL SEVERANCE TAX

(12/03/2005)

The case could have cost WV and WV counties millions of dollars in refunds, if the state's coal companies had won. The companies sued in an effort to keep from paying severance taxes on exports. The state Supreme Court in West Virginia has upheld the state's right to tax coal exports. In yesterday's ruling, the justices rejected arguments that the state's severance tax is actually a sales tax that violates federal protections of interstate commerce. If the court had struck down the tax, the state would have been forced to refund an estimated $500 million dollars in tax revenue and interest to the eleven coal companies that challenged it. Exports make up about ten percent of West Virginia's total coal sales, and eliminating the severance tax on them would cost the state between $40 million and $50 million dollars each year. The high court found more than a half-dozen legal conclusions supporting the state's power to levy the tax. The ruling said West Virginia's coal severance taxes are similar to others found to be constitutional by the US Supreme Court. The lawyer for the coal companies says they will appeal.

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