America's Property Tax Advisor

Natural Gas Property Valuation Remains Unclear in West Virginia


The West Virginia Legislature will have to start from scratch to develop methodology for assessing natural gas producing property in the state. Previous practice was ruled unconstitutional by the West Virginia Supreme Court of Appeals in 2019.


The Legislature’s Rule-Making Review Committee voted unanimously against a new law proposed by the State Tax Department that requires fair market value to be based on a yield capitalization model applied to gross royalty payments.


Officials argued the law fails to recognize the differences and complexities common in the industry and appears to take a “one size fits all” approach to property tax valuation, which is not representative of the industry.


Until new legislation is approved, an emergency rule remains in place, which allows state tax officials to base assessments on reasonableness if a company’s tax filing paperwork is incomplete.