Bill > SB405

This bill establishes a new system for collecting West Virginia personal income tax from nonresidents who receive royalty payments from natural resources extracted within the state. Specifically, any company or individual, referred to as a "lessee," that pays royalties for the extraction of natural resources like coal, oil, or timber to someone who doesn't live in West Virginia must withhold a portion of that payment to cover the estimated income tax owed to the state. This withholding requirement is generally mandatory unless the royalty payments to a nonresident are less than $1,000 annually, in which case the lessee has the option to withhold. The amounts withheld are then paid to the Tax Commissioner on behalf of the nonresident recipient, who will receive credit for these payments against their actual tax liability and can claim a refund for any overpayment. The bill also mandates that lessees provide annual withholding statements to the recipients and file reconciliation reports with the Tax Commissioner, with specific requirements for electronic filing for those with 25 or more lessors, and outlines penalties for non-compliance, along with granting the Tax Commissioner the authority to create rules and regulations to implement these provisions, with the changes taking effect for taxable years beginning after December 31, 2026.

Budget and Finance

http://www.wvlegislature.gov/Bill_Status/Bills_history.cfm?input=405&year=2026&sessiontype=RS&btype=bill