The bill introduced on March 20, 2025, aims to amend the Code of West Virginia by adding a new section, 11-21-71c, which establishes a withholding tax on income derived from natural resources royalty payments made to nonresident lessors by lessees. The legislation outlines the necessity for this tax collection mechanism due to significant revenue losses from out-of-state lessors. It mandates that lessees withhold West Virginia personal income tax from royalty payments to nonresidents, with specific provisions for calculating the withholding amount and exceptions for those receiving less than $1,000 annually. The bill also stipulates that withheld taxes be paid to the Tax Commissioner on behalf of the nonresidents, who are entitled to refunds for any overpayments.

Additionally, the bill requires lessees to provide annual withholding statements and file reconciliation reports with the Tax Commissioner, including electronic filing for those with 25 or more lessors. It establishes penalties for non-compliance and allows the Tax Commissioner to propose rules for implementation. The provisions of this section will take effect for all taxable years beginning after December 31, 2025.

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