W.Va. Coal Group Trumpets Study in Call for Steep Severance Tax Relief

SNL - The West Virginia Coal Association, or WVCA, announced a new study aiming to bolster their argument for a steep reduction in its tax burden, an effort it said could help turn the tide on the state's flailing coal sector. Read

The trade association hopes the West Virginia legislature will cut the coal severance tax rate from 5% to 2% to increase the state's competitiveness with neighboring coal-producing states that have little to no severance tax. In a Feb. 15 news release, the group touted a PricewaterhouseCoopers report that predicts the reduction in severance taxes would allow for increased sales and production of coal from West Virginia.

"Over 1,500 hard-working West Virginia miners have been laid off or received notices in the past two months," said WVCA President Bill Raney. "West Virginia's excessive coal severance tax is a significant cause of the recent layoffs and it must be reduced immediately to prevent more job loss."

The report concluded that the tax rate cut would save 1,864 West Virginia jobs — a combination of 464 direct coal mining jobs, 345 coal transportation jobs, 490 indirect jobs in supplier industries and jobs induced from saved household spending. The report projects in its baseline case that $132 million in labor income and $299 million in gross domestic product would be saved annually by the state.

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