CHARLESTON, W.Va. — A Senate committee approved two bills representing tax credits aimed at West Virginia’s petrochemical industry.
HB 4421, called the Natural Gas Liquids Economic Development Act, would provide a credit to businesses that store or transfer natural gas. The goal of the bill is to attract an ethane cracker plant or storage hub.
HB 4019, called the Downstream Natural Gas Manufacturing Investment Tax Credit Act of 2020, would allow eligible taxpayers to take a credit against the portion of state income taxes that come from the taxpayer’s investment in a new or expanded downstream natural gas manufacturing facility provided it creates new jobs.
The Senate’s Economic Development Committee considered and passed each bill during a session on Saturday. Each bill also has a reference to the Senate Finance Committee.
In committee discussion, Senator Eric Tarr, R-Putnam, said incentives already exist but are so stringent they’re hardly used.
Senator Bill Ihlenfeld, D-Ohio, wondered what incentives are offered by surrounding, natural gas-producing states.
“It’s clear we’re trying to make West Virginia is competitive with our surrounding states when it comes to this kind of economic development,” Ihlenfeld said.
Senator Mike Romano, D-Harrison, said he would like to better compare the taxes that apply to natural gas in West Virginia to those in other states.
“We do charge a higher severance tax than other states, but there’s all kinds of other taxes on oil and gas production,” he said. For example, he said, Pennsylvania has a lower severance tax but also charges an impact fee.
He requested a study resolution to summarize oil and gas taxes in comparison to other states. Tarr and Senator Rollan Roberts, R-Raleigh, said that would be redundant to information requested in previous legislation.
Romano’s motion resulted in a 6-6 tie, which defeated it.
But the committee’s chairman, Senator Chandler Swope, R-Mercer, had voted with Romano and said he had been wondering about the same issue. Swope said he has already been trying to compile the information.
One way or another, Swope said he would get the tax comparison information and share it.