Incentives Watch: West Virginia and Other States Establish Tax Credits For Coal Companies

Despite the popularity of renewable energy, more and more states are enacting tax credits that benefit the coal industry. For example, Alabama recently expanded its capital tax credit to include investments in the coal mining industry. 

Virginia recently extended its coalfield employment enhancement tax credit to tax years starting prior to Jan. 1, 2017. Previously, the credit was available for tax years starting before Jan. 1, 2015. The credit allows Virginia coal producers to claim one of two credits, depending on the method used to mine the coal. For more information about the credit, check out this Weekly State Tax Reportarticle.

In order to encourage certain facilities to locate, or remain, in West Virginia, a severance tax credit was established for suppliers of coal to electric utilities that provide financial assistance to certain industrial facilities via special electricity rates. The credit is available starting with the 2012 tax year. For more information about H.B. 101, check out this Weekly State Tax Reportarticle.

Alabama, Alaska, Arizona, Arkansas, Illinois, Indiana, Kansas, Kentucky, Maryland, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, and Texas also offer various coal-related tax credits, according to the Bloomberg BNA State Tax Portfolios.

­­­­­­­­ In other developments . . .

Utah established a new credit for taxpayers with disabled dependent adults or children, according to a recent Bloomberg BNA Weekly State Tax Reportarticle. The legislation allows taxpayers to add, in the calculation of their tax credit, an additional 75 percent of the amount deducted as a personal exemption on their federal return for each disabled dependent adult or child. 

By: Kathleen Caggiano

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