Current through Register Vol. XLI, No. 38, September 20, 2024
5.1. The value of a pollution control
facility first placed in operation subsequent to July 1, 1973 is, for the
purpose of ad valorem taxation, considered to be its salvage value.
5.2. When allocating value to a coal waste
disposal power project, the salvage value shall be accorded to a portion of the
total personal property at the project. That portion shall be equal to the
ratio of tons of West Virginia coal waste burned and disposed of at the project
to the total tons of coal and coal waste burned and disposed of at the project
during the immediately preceding calendar year.
5.2.1. For a project placed in service prior
to March 11, 1995 at which the ratio for the calendar year ending December 31,
1994 was less than 70%, the salvage value shall be accorded to 63% of the total
personal property at the project for tax years beginning after March 11, 1995,
regardless of the actual ratio for any calendar year. The remaining portion of
the personal property at the project, but in no event less than 25% of the
total personal property at the project, shall be accorded full value, that is
value without reference to salvage value.
5.3. A facility will not qualify as a
pollution control facility under W. Va. Code §
11-6A-5(b)
if it burns coal, coal waste or fuel waste obtained from outside West Virginia
after March 11, 1995.
5.4. Where
the pollution control facility produces a profitable by-product or where a part
of the facility is required for the operation of the business without regard to
the requirements of state or federal air or water qualify standards, the tax
commissioner shall allocate or separate that portion of value attributable to
the pollution control activity. Two (2) methods have been developed whereby the
Tax Commissioner may accomplish that activity:
5.4.1. Component Method.
5.4.1.1. The component method shall receive
primary consideration as a method of allocation or separation of values of a
pollution control facility. The component method of allocation or separation of
values requires the identification of the specific item or component of
machinery and/or equipment which is used for the purpose of pollution abatement
control but which is also an integral part of the production process and the
identification of the acquisition cost of the specific item or component. The
component thus identified shall be appraised at five percent (5%) of the
acquisition cost. (For example, a conveyor belt system is used to transport
fuel to a boiler to produce energy. The conveyor belt line, while not a
pollution abatement control device, contains water sprays and is totally
enclosed to retard dust during the transportation process. While the belt line
is not a pollution abatement control device but an integral part of the
production process, the dust conveyors and the water sprays are eligible
pollution abatement facilities. The acquisition costs of these items eligible
for salvage value treatment are readily discernible and shall receive salvage
value treatment.)
5.4.1.2. If an
item or the cost associated with an item is not discernible, the alternative
substitution method shall be used.
5.4.2. Substitution Method.
5.4.2.1. When acquisition costs for eligible
pollution abatement control items or components are not discernible or the
items' or components' use or purpose are such an integral part of the
production process that the specific use or task is not clearly ascertainable,
the substitution method shall be applied.
5.4.2.2. The substitution method of
allocation or separation of valuation is based on the assumption that the value
attributable to pollution control is the difference between the value of a
similar facility which has the same utility without the pollution abatement
attributes and the value of the subject property being appraised which has
pollution abatement attributes. (For example, a double-walled pipe used for the
transportation of a product from the manufacturing area of the plant to the
loading area. A single-walled pipe or other means of transportation is required
for the operation of the business whereas the cost of the double-walled pipe is
twenty-five percent (25%) higher than single wall.) The additional cost of the
twenty-five percent (25%) would represent the value attributable to pollution
abatement control for the purposes of ad valorem taxation.
