Establishing road or highway infrastructure improvement projects or coal production and processing facilities tax credit
SB60 creates a new West Virginia severance tax credit for eligible taxpayers that make qualified expenditures in either certified road or highway infrastructure improvement projects or coal production and processing facilities. The bill allows a credit equal to 50% of qualifying expenditures, with the credit generally usable against up to 20% of annual severance tax liability and carried forward for up to nine subsequent taxable years if unused. For road and highway projects, taxpayers must obtain prior certification from the Secretary of Transportation before construction begins, submit detailed project information, and the Secretary may certify no more than $100,000 in total road-related expenditures for the credit.
For coal-related investments, the bill defines qualified expenditures broadly to include construction, installation, fabrication, repairs, upgrades, and refurbishments tied to coal production and processing facilities, including machinery and equipment directly used in those facilities. The bill also sets rules for calculating qualified investment based on useful life, limits related-party purchases, allows transfer of unused credits to successor businesses in certain cases, and requires taxpayers to maintain records or risk forfeiture and redetermination of credits. The credit applies to tax years beginning on or after January 1, 2025.
SB60 would add a new article to the West Virginia Code creating a severance tax credit regime tied to private investment in transportation infrastructure and coal production/processing facilities. It would affect taxpayers subject to the severance tax, the Department of Transportation through project certification, and the Tax Commissioner through administration, recordkeeping, and enforcement. The bill would also establish new statutory definitions, application procedures, credit limitations, carryforward rules, forfeiture provisions, and compliance requirements for taxpayers claiming the credit.
The bill text and accompanying note indicate generally favorable intent, emphasizing infrastructure improvement, private capital investment, and economic opportunity, especially in coal-producing areas. The available context does not show recorded committee debate or votes, so there is no documented opposition or amendment activity in the provided materials. Overall, the measure appears to be presented as a pro-investment, pro-infrastructure tax incentive bill.
The main policy tension in SB60 is between using severance tax credits to incentivize private road and highway improvements and coal facility investment versus limiting state revenue and creating administrative complexity. The bill’s $100,000 cap on road-related certified expenditures suggests concern about limiting exposure, while the certification requirement before construction may be a point of friction for taxpayers seeking flexibility. Potential contention also exists around the breadth of coal-related qualifying expenditures, the use of severance tax credits for private capital projects, and the forfeiture/redetermination rules if property is sold, disposed of, or taken out of service before the end of its useful life.