Current through Register Vol. XLI, No. 38, September 20, 2024
13.1.
When recapture tax
applies. --
13.1.1. Any person who
places qualified investment property in service or use for purposes of this
rebate and who fails to use the qualified investment property or any portion
thereof for at least five years in the production of coal in this state at the
coal mining operation where it was placed in service or use shall pay the
recapture tax imposed by W. Va. Code §
11-13EE-11(b).
No temporary downtime can exceed 30 consecutive days.
13.1.2. This section does not apply when
section heading 9 of this rule, relating to transfer of qualified investment
property, applies. However, the successor(s) may be subject to a recapture tax
in the event they prematurely dispose of the qualified investment property or
any portion thereof.
13.1.3. When
the severance tax return filed by the taxpayer, or taxpayer's controlled or
affiliated group, as applicable, is audited and the amount of severance tax
rebate allowable is redetermined, resulting in less rebate being allowable,
then if the rebate amount has already been paid by the Tax Commissioner, the
recapture tax will be assessed to recover the amount of rebate that was
erroneously paid.
13.1.4. When the
taxpayer's books and records, or the books and records of taxpayer's controlled
or affiliated group, as applicable, are audited and the amount of severance tax
rebate allowable is redetermined, resulting in less rebate being allowable,
then if the rebate amount has already been paid by the Tax Commissioner, the
recapture tax will be assessed to recover the amount of rebate that was
erroneously paid.
13.2.
Recapture tax imposed. --
If the taxpayer prematurely removes from service qualified
investment property at the coal mining operation in this state where it was
first placed in service or use prior to its fifth anniversary after being
placed in service or use, the Tax Commissioner shall recapture the amount of
rebate claimed under W. Va. Code §
11-13EE-1,
et seq., for the current taxable year, and all preceding
taxable years, attributable to qualified investment property that was
prematurely removed from service at the coal mining operation in this state at
which the qualified investment property was first placed in service or
use.
13.3.
Payment
of recapture tax.
13.3.1. The
recapture tax is due and payable on the day the taxpayer's annual severance tax
return is due under W. Va. Code §
11-13A-1,
et seq., including any authorized extension of time for filing
the return, for the taxable year in which there was a premature removal of
qualified investment property from service or use at the coal mining operation
at which it was first placed in service or use and qualified for the rebate
allowed by W. Va. Code §
11-13EE-1,
et seq.
13.3.2.
The recapture tax shall be paid by the taxpayer subject to the recapture tax.
However, if the taxpayer does not pay the recapture tax and the taxpayer is a
partnership, limited liability company, an S corporation, or other flow-through
entity, for federal income tax purposes, then the recapture tax shall be paid
by those persons who are equity owners of the partnership, limited liability
company, S corporation, or other flow-through entity, in the taxable year in
which recapture tax is imposed under W. Va. Code §
11-13EE-11.
The equity owners are liable for their respective proportionate shares of the
recapture tax, determined in accordance with how income, gain, loss, deductions
and other items are distributable for the taxable year among the equity
owners.
