West Virginia Code of State Rules › Agency 110 - Tax › Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT › Series 110-13AC - Reduced Severance Tax Rates for Thermal or Steam Coal › Section 110-13AC-6 - Records

Current through Register Vol. XLI, No. 28, July 12, 2024
6.1. Any person
				having a right or claim to the reduced rate on thermal or steam coal must
				maintain adequate records to show that the coal was ultimately sold to an
				electric power company for the purpose of generating or producing electricity.
				On audit, the taxpayer should be able to provide invoices, sales contracts, and
				bills of receipt documenting the vendor name, purchaser's name, the invoice
				date, and invoice amount. For purposes of determining whether certain coal is
				"thermal or steam coal" within the meaning of W.Va. Code §
									11-13A-3,
				the taxpayer is not required to submit documentation with its severance tax
				return regarding sulfur content, ash content, or British thermal unit value,
				etc., for specific coal sales.
6.1.1. Where
				coal is sold directly to an electric power company for purposes of generating
				or producing electricity, the taxpayer must retain in its records the bill of
				sale or invoice showing the tons sold and the sale price of the coal sold for
				the purpose of generating electricity.
6.1.2. Where coal is sold to an electric
				power company for purposes of generating or producing electricity by using the
				services of a broker or another entity and there has been an intermediary sale,
				the taxpayer must retain in its records:
(1)
				the bill of sale or invoice showing the tons sold to the broker or
				intermediary, and the sale price of tons sold to the broker or intermediary;
				and
(2) an attestation from the
				broker or intermediary stating the number of tons sold to an electric power
				company or, in the case of successive sales, the number of tons sold to another
				broker or intermediary. The attestation should state the cost of those specific
				tons paid by the broker or intermediary to the producer or taxpayer for the
				purchase of those specific tons for which the reduced severance tax rate is
				claimed; and
(3) an attestation
				from the broker or end user of the taxpayer's coal that the specific batch of
				coal for which the reduced severance rate is claimed was sold to an electric
				power company and consumed in the generation or production of electricity. In
				the event the broker or intermediary and coal producer are affiliates, the
				broker must also provide documentation that the end user is in fact consuming
				the coal for the purposes of generating or producing
				electricity.
6.1.3. In
				the case of successive sales, or multiple successive sales, between one broker
				or intermediary and another broker or intermediary where the ultimate sale to
				the consumer of the coal is a sale to an electric power company for purposes of
				generating or producing electricity, each party in the series of sales must
				provide the verifications and information described in this subsection. Failure
				to provide such verifications and information will result in denial of the
				special tax rate.