Senate Bill No. 678
(By Senators Ross and Helmick)
[Introduced February 23, 1998; referred to the
Committee on Energy, Industry and Mining; and then to the
Committee on Finance.]
A BILL to amend and reenact section three-a, article thirteen-a,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to exemptions
of certain natural gas and oil production from imposition of
the severance tax.
Be it enacted by the Legislature of West Virginia:
That section three-a, article thirteen-a, chapter eleven of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted to read as follows:
ARTICLE 13A. SEVERANCE TAXES.
§11-13A-3a. Imposition of tax on privilege of severing natural
gas or oil.
(a) Imposition of tax. -- For the privilege of engaging or continuing within this state in the business of severing natural
gas or oil for sale, profit or commercial use, there is hereby
levied and shall be collected from every person exercising such
privilege an annual privilege tax: Provided, That effective for
all taxable periods beginning on or after the first day of
January, one thousand nine hundred ninety-nine, there is an
exemption from the imposition of the tax provided for in this
article on the following: (1) Free natural gas provided to any
surface owner; (2) natural gas produced from any well which
produced an average of less than five thousand cubic feet of
natural gas per day during the calendar year immediately
preceding a given taxable period; (3) any oil well which
produced an average of less than one-half barrel of oil per day
during the calendar year immediately preceding a given taxable
period; (4) all natural gas or oil produced from any well which
has not produced marketable quantities of natural gas or oil for
a period of ten calendar years but for the two consecutive years
immediately preceding the ten year period produced marketable
quantities of natural gas or oil; and (5) on natural gas and oil
products during the twenty-four consecutive months immediately
following the date of the first production of natural gas and oil
products from wells which were first drilled on or after the
first day of January, one thousand nine hundred ninety-nine.
(b) Rate and measure of tax. -- The tax imposed in subsection (a) of this section shall be five percent of the gross
value of the natural gas or oil produced, as shown by the gross
proceeds derived from the sale thereof by the producer, except as
otherwise provided in this article.
(c) Tax in addition to other taxes. -- The tax imposed by
this section shall apply to all persons severing gas or oil in
this state, and shall be in addition to all other taxes imposed
(d) Effective date. -- This section, as enacted in the year
one thousand nine hundred ninety-three, shall apply to gross
proceeds derived after the thirty-first day of May of such year.
The language of section three of this article, as in effect on
the first day of January of such year, shall apply to gross
proceeds derived prior to the first day of June of such year and,
with respect to such gross proceeds, shall be fully and
NOTE: The purpose of this bill is to exempt from severance
tax certain natural gas and oil production.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.