Study Finds Limited Relief for W.Va. Coal Producers Under State Tax Reductions

SNL Financial - West Virginia coal producers could create between 150 and 196 jobs and provide $34 million in new economic activity if the state were to implement policies that favor in-state coal, a recent report from the West Virginia University Bureau of Business and Economic Research, or BBER, found. Read

The report, titled "Government Incentives to Promote Demand for West Virginia Coal," looks at two potential policies that would encourage the use of West Virginia-produced coal by West Virginia utilities. One would allow a $3 severance tax reduction to be passed along to utilities burning in-state coal. Another is a 5% subsidy for the purchase of in-state coal that would be applied against electric utilities' business and occupation taxes.

The research was commissioned by the West Virginia Department of Revenue following "lengthy discussion" of such policies in the 2014 session of the West Virginia Legislature. The WVU researchers found that either policy would increase coal demand for West Virginia producers by approximately half a million tons of coal and generate as much as $34 million in new economic activity by stimulating up to an estimated 11% production increase over the 113 million tons of coal produced in state in 2013.


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