SB 405
Relating to nonresident income tax for natural resources royalty payments received from lessees
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Sign in to take action- Introduced
- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
This bill requires West Virginia lessees of natural resource properties to withhold a portion of natural resources royalty payments made to non-resident lessors and remit those funds to the Tax Commissioner on behalf of the non-resident lessor. The bill establishes guidelines for calculating the amount to be withheld, including annual statements and reconciliation requirements. It also outlines penalties for noncompliance and allows for rulemaking to implement the provisions.
Key provisions
- Requires lessees to withhold West Virginia personal income tax from natural resources royalty payments to non-resident lessors.
- Establishes a method for calculating the amount of tax to be withheld, aiming for an amount equivalent to the estimated state tax due.
- Allows for exceptions to withholding requirements if payments are below $1,000 annually.
- Requires lessees to provide annual statements to lessors detailing payments and withheld taxes.
- Mandates annual reconciliation and filing of withholding returns.
- Permits electronic filing under certain circumstances.
- Includes provisions for criminal and civil penalties for noncompliance.
- Authorizes the Tax Commissioner to create rules to implement the bill’s provisions.
Who is affected
- Lessees of West Virginia real estate
- Non-resident lessors of natural resources
- West Virginia Tax Commissioner
- Natural resource producers
- Individuals and businesses involved in mineral extraction
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