(a)Taxable event. The following shall apply:
(i)There is levied a severance tax on the value of
the gross product for the privilege of severing or extracting
both surface and underground coal in the state. The severance
tax imposed by this article may be in addition to other taxes,
including but not limited to the ad valorem taxes imposed by
W.S. 39-13-104.
(b)Basis of tax (valuation). The following shall apply:
(i)Coal shall be valued for taxation as provided in
this subsection;
(ii)The value of the gross product shall be the fair
market value of the product at the mouth of the mine where
produced, after the mining or production process is completed;
(iii)Except as otherwise provided, the mining or
production process is deemed completed when the mineral product
reaches the mouth of
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(a) Taxable event. The following shall apply:
(i) There is levied a severance tax on the value of
the gross product for the privilege of severing or extracting
both surface and underground coal in the state. The severance
tax imposed by this article may be in addition to other taxes,
including but not limited to the ad valorem taxes imposed by
W.S. 39-13-104.
(b) Basis of tax (valuation). The following shall apply:
(i) Coal shall be valued for taxation as provided in
this subsection;
(ii) The value of the gross product shall be the fair
market value of the product at the mouth of the mine where
produced, after the mining or production process is completed;
(iii) Except as otherwise provided, the mining or
production process is deemed completed when the mineral product
reaches the mouth of the mine. In no event shall the value of
the mineral product include any processing functions or
operations regardless of where the processing is performed;
(iv) Except as otherwise provided, if the product as
defined in paragraph (iii) of this subsection is sold at the
mouth of the mine, the fair market value shall be deemed to be
the price established by bona fide arms-length sale;
(v) In the event the product as defined in paragraph
(iii) of this subsection is sold at the mouth of the mine
without further movement or processing, the fair market value
shall be the price established by bona fide arms-length sale
less exempt royalties;
(vi) In the event the product as defined in paragraph
(iii) of this subsection is not sold at the mouth of the mine by
bona fide arms-length sale, or, except as otherwise provided, if
the product of the mine is used without sale, the department
shall determine the fair market value of coal in accordance with
paragraph (vii), (viii), (ix) or (x) of this subsection;
(vii) For coal sold away from the mouth of the mine
pursuant to a bona fide arms-length sale, the department shall
calculate the fair market value of coal by multiplying the sales
value of extracted coal, less transportation to market provided
by a third party to the extent included in sales value, all
royalties, ad valorem production taxes, severance taxes, black
lung excise taxes and abandoned mine lands fees, by the ratio of
direct mining costs to total direct costs. Nonexempt royalties,
ad valorem production taxes, severance taxes, black lung excise
taxes and abandoned mine lands fees shall then be added to
determine fair market value. For purposes of this paragraph:
(A) The sales value of extracted coal shall be
the selling price pursuant to an arms-length contract. To the
extent not included in the selling price pursuant to an arms-
length contract, and to the extent that the following represent
partial consideration for the value of the coal, sales value
shall include the value per ton attributable to the extracted
coal for any consideration provided to the seller in the form of
heat content adjustments, price escalations or de-escalations,
expense reimbursements, capital, facilities or equipment,
services for mining, handling, processing or transporting the
coal at or near the mine site, or any payment received for the
current or past sale of extracted coal, by or on behalf of the
purchaser. Sales value per ton shall include consideration
provided for the deferral of extraction and sale in the taxable
period in which the purchaser receives credit for the payment as
a result of subsequent extraction and sale of the deferred
production;
(B) Direct mining costs include mining labor
including mine foremen and supervisory personnel whose primary
responsibility is extraction of coal, supplies used for mining,
mining equipment depreciation, fuel, power and other utilities
used for mining, maintenance of mining equipment, coal
transportation from the point of severance to the mouth of the
mine, and any other direct costs incurred prior to the mouth of
the mine that are specifically attributable to the mining
operation;
(C) Total direct costs include direct mining
costs determined under subparagraph (B) of this paragraph plus
mineral processing labor including plant foremen and supervisory
personnel whose primary responsibility is processing coal,
supplies used for processing, processing plant and equipment
depreciation, fuel, power and other utilities used for
processing, maintenance of processing equipment, coal
transportation from the mouth of the mine to the point of
shipment, coal transportation to market to the extent included
in the price and provided by the producer, and any other direct
costs incurred that are specifically attributable to the mining,
processing or transportation of coal up to the point of loading
for shipment to market;
(D) Indirect costs, royalties, ad valorem
production taxes, severance taxes, black lung excise taxes and
abandoned mine lands fees shall not be included in the
computation of the ratio set forth in this paragraph. Indirect
costs include but are not limited to allocations of corporate
overhead, data processing costs, accounting, legal and clerical
costs, and other general and administrative costs which cannot
be specifically attributed to an operational function without
allocation.
(viii) For coal used without sale, or coal not sold
pursuant to a bona fide arms-length agreement, the sales value
for the purposes of paragraph (vii) of this subsection shall be
the fair market value of coal which is comparable in the
quality, quantity, terms and conditions under which the coal is
being used or sold, both in the spot market and through long-
term agreements negotiated within the previous twelve (12)
months, multiplied by the respective number of tons used or sold
for each reporting period;
(ix) Notwithstanding paragraph (viii) of this
subsection, the sales value for purposes of paragraph (vii) of
this subsection for coal used as a feedstock in a coal
enhancement process which has been subjected to normal processes
necessary to achieve marketability, shall be the market value of
comparable coal as determined by this paragraph. The market
value of comparable coal attributable to feedstock coal shall
be:
(A) A representative selling price received or
receivable which shall be determined by the first of the
following subdivisions that is applicable, multiplied by the
total feedstock tons used in each reporting period:
(I) Arms-length price of comparable coal
produced from the same mine and sold under comparable terms, or
if a comparable coal price is not available from the same mine,
the arms-length price of comparable coal produced from other
mines in the area and sold under comparable terms;
(II) Price reported to a public utility
commission for comparable coal produced from the same mine and
sold under comparable terms, or if a comparable coal price is
not available from the same mine, the price reported to a public
utility commission for comparable coal produced from other mines
in the area and sold under comparable terms;
(III) Other published or publicly available
market prices for comparable coal produced from mines in the
area and sold under comparable terms.
(B) If subparagraph (A) of this paragraph is not
applicable, then the sales value for coal used as a feedstock
shall be the total arms-length selling price of the enhanced
coal sold during the reporting period multiplied by the total of
the enhanced tons sold.
(x) In the event that unique or unusual circumstances
exist such that the department or the taxpayer is unable to
determine the value of the gross product of coal from a mine or
mining claim by application of the methods provided in this
subsection, the taxpayer may petition the department for
approval to use an alternate valuation method. The department
shall approve or deny the use of an alternate valuation method
and shall so inform the parties within forty-five (45) days of
the date the petition is filed.
(c) Taxpayer. The following shall apply:
(i) In the case of the gross product of all mines and
mining claims produced under lease, the lessor is liable for the
payment of ad valorem taxes on the product removed only to the
extent of the lessor's retained interest under the lease,
whether royalty or otherwise, and the lessee or his assignee is
liable for all other ad valorem taxes due on production under
the lease;
(ii) Any taxpayer paying the taxes imposed by this
article on any valuable deposit may deduct the severance taxes
paid from any amounts due or to become due to the interest
owners of such valuable deposit in proportion to the interest
ownership;
(iii) Any person extracting valuable products subject
to this chapter and any person owning an interest in the
valuable products to the extent of their interest ownership are
liable for the payment of the severance taxes imposed by this
article together with any penalties and interest.