The bill aims to amend the Code of West Virginia by introducing a new section, 11-21-71c, which mandates that lessees of West Virginia real estate withhold personal income tax from natural resources royalty payments made to nonresident lessors. The legislation outlines the necessity for this withholding due to significant tax revenue losses from out-of-state lessors and establishes a framework for tax collection. It defines key terms such as "lessor," "natural resource," and "natural resources royalty payment," and specifies that lessees must withhold taxes based on estimated liabilities, with exceptions for those receiving less than $1,000 annually.

Additionally, the bill requires lessees to provide annual withholding statements to lessors, file returns, and pay withheld taxes to the Tax Commissioner. It includes provisions for penalties for non-compliance and allows for rulemaking by the Tax Commissioner to implement these requirements. The effective date for these provisions is set for taxable years beginning after December 31, 2025. Overall, the bill seeks to ensure equitable tax collection from nonresident lessors while providing a structured process for compliance and reporting.

Statutes affected:
Introduced Version: 11-21-71c
Committee Substitute: 11-21-71c