SB 840
Relating to nonresident income tax for natural resources royalty payments received from lessees
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- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
This bill establishes a system for West Virginia to collect personal income tax on natural resources royalty payments received by nonresidents. Lessees of West Virginia real estate who receive royalty payments from out-of-state lessors are required to withhold West Virginia income tax from those payments. The withheld taxes will be paid to the Tax Commissioner on behalf of the nonresident lessor, with potential refunds issued to the lessor if overpaid. The bill also outlines requirements for annual statements, reconciliation, and electronic filing, along with penalties for noncompliance.
Key provisions
- Requires lessees to withhold West Virginia personal income tax on natural resources royalty payments to nonresident lessors.
- Establishes a process for lessees to pay withheld taxes to the Tax Commissioner on behalf of nonresident lessors.
- Allows for exceptions to withholding requirements for payments under $1,000 annually.
- Mandates annual withholding statements and reconciliation filings by lessees.
- Requires electronic filing under certain circumstances.
- Includes provisions for criminal and civil penalties for non-compliance.
- Authorizes the Tax Commissioner to promulgate rules to implement the bill.
- Specifies that ‘natural resources royalty payment’ includes various types of payments related to mineral rights.
Who is affected
- Lessees of West Virginia real estate
- Nonresident mineral lessors
- West Virginia Tax Commissioner
- Residents of West Virginia (through tax revenue collection)
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