HB 5159
Relating to withholding tax on income of nonresidents from natural resources royalty payments
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- Passed House of Delegates
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill requires West Virginia lessees of natural resource properties to withhold state personal income tax from royalty payments made to nonresident lessors. It establishes a system for collecting taxes owed by out-of-state parties receiving income from West Virginia mineral resources. The bill includes provisions for annual statements, filing requirements, penalties for non-compliance, and allows the Tax Commissioner to create rules to implement the changes.
Key provisions
- Requires lessees to withhold West Virginia personal income tax on natural resources royalty payments to nonresident lessors.
- Establishes a method for calculating the amount of tax to be withheld, aiming for an amount equivalent to estimated state tax liability.
- Allows lessees to opt-out of withholding if royalty payments are below $1,000 annually.
- Specifies that withheld taxes are to be paid to the Tax Commissioner on behalf of the nonresident lessor.
- Mandates annual withholding statements and reconciliation filings with the Tax Commissioner.
- Requires electronic filing for lessees with 25 or more lessors.
- Creates penalties for non-compliance, including potential criminal and civil fines.
- Grants the Tax Commissioner rulemaking authority to implement the bill's provisions.
Who is affected
- Lessees of West Virginia real estate
- Nonresident mineral lessors
- West Virginia Tax Commissioner
- Individuals and businesses receiving natural resources royalty payments
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