Rebate carry back, carry forward, and transfer

10.1. No rebate allowable under W. Va. Code §11-13EE-1, et seq. for qualified investment property placed in service or use may be carried back to a taxable year before the taxable year in which the qualified investment property is placed in service or use; unused severance tax rebate may only be carried forward.

10.2. When the amount of rebate allowable exceeds 80 percent of the state portion of the additional severance tax payable on the increased production at the mine where the qualified investment is placed in service or use during the taxable year for which the application for rebate is submitted, then the unused portion of the rebate amount may be claimed as rebate in subsequent taxable years by filing a claim for unused rebate with the Tax Commissioner no later than the due date of the annual severance tax return for the carried forward taxable year, determined with regard to any authorized extension of time for filing the annual return. Under no circumstances can the unused rebate be claimed after the expiration of the tenth consecutive tax year after the qualified investment giving rise to the rebate is placed in service or use.

10.3. The allowable rebate can only be used to recover the state portion of severance tax payable attributable to coal produced at the coal mining operation at which the qualified investment property was first placed in service or use. The amount of severance tax subject to the remainder rebate each year is determined by comparing (1) the amount of the state portion of severance tax payable for the taxable year in which rebate carry forward is sought (before credits such as the credit for payment of the minimum severance tax) on the increase in coal production at the mine where the qualified investment was placed in service or use, with (2) the amount of the state portion of severance tax imposed by W. Va. Code §11-13A-3(a) paid during for the base production period, as established in accordance with the provisions of W. Va. Code §11-13EE-3 and section heading 3 of this rule.

10.3.1. The rebate amount carried forward can only be applied against 80 percent of the state portion of the increased severance tax payable for the taxable year to which the rebate amount is carried forward that is attributable to the qualified investment property.

10.3.2. Any rebate remaining after the tenth consecutive year following the taxable year in which the qualified investment property is placed in service or use is forfeited.

10.3.3. The amount of rebate carried forward may be paid only when coal production at the mine in the carry forward year continues to be greater than the base production amount.

10.3.4. Under no circumstances may the rebate be treated as refundable credit.

10.4. When the taxpayer operates more than one coal mine in West Virginia, and when the taxpayer is a member of a controlled or affiliated group that operates more than one coal mine in West Virginia, the increase in coal production is determined by comparing:

10.4.1. The tons of coal produced at all mines in this state operated by the taxpayer, or by all mines operated in this state by all members of the taxpayer’s controlled or affiliated group, including the taxpayer, as appropriate, for the taxable year for which rebate is sought with tons of coal produced by all such mines in the base production year; and

10.4.2. Tons of coal produced at the mine at which the qualified investment property was placed in service or use during the taxable year for which rebate is sought with the tons of coal produced at that mine during the base production year.

10.4.3. There must be an increase in the total tons of coal produced at all mines operated in this state by the taxpayer, or by all mines operated in this state by all members of the taxpayer’s affiliated or controlled group, including the taxpayer, equal to or greater than the increase in the tons of coal produced at the mine at which the qualified investment property was placed in service or use. There must also be a corresponding increase in the number of full-time equivalent employees in accordance with section heading 3.

10.5. The provisions limiting the rebate set forth in this rule also apply when the taxpayer files a claim for application of an amount of rebate carried forward.

10.6. No provision in W. Va. Code §11-13EE-1, et seq., allows transfer of the coal severance tax rebate, including but not limited to transfer between members of a controlled or affiliated group, in the absence of a transfer of the qualified investment property to a successor as provided in this rule.