Bill > HB5159

This bill mandates that companies or individuals (lessees) who lease West Virginia real estate and pay royalties for natural resources extracted from that property to individuals or entities that do not reside in West Virginia must withhold West Virginia personal income tax from those royalty payments. This withholding is intended to ensure that taxes owed to the state on income earned from West Virginia's natural resources are collected, as there's currently no effective mechanism for this when the recipient of the payment lives out of state. The amount withheld will be based on an estimate of the tax due for the year, with the Tax Commissioner determining the specific method for calculating this. However, withholding is optional for payments under $1,000 annually and is at the lessee's discretion. Amounts withheld are credited to the nonresident lessor towards their West Virginia tax liability, and any excess will be refunded. The bill defines "lessor" broadly to include individuals, estates, trusts, or business entities that lease property for natural resource extraction, and "natural resource" encompasses a wide range of minerals, timber, and other products. "Natural resources royalty payment" is defined as payments made for the right to extract natural resources, including various types of interests and bonuses. Lessees required to withhold must provide annual statements to lessors detailing payments and taxes withheld, and file withholding returns and pay the collected taxes to the Tax Commissioner, with specific deadlines and reconciliation requirements. The Tax Commissioner is granted authority to prescribe rules for implementation, including emergency rules, and to adjust due dates based on industry practices. The provisions of this bill will take effect for all taxable years beginning after December 31, 2026.

Transportation and Infrastructure

http://www.wvlegislature.gov/Bill_Status/Bills_history.cfm?input=5159&year=2026&sessiontype=RS&btype=bill