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 on natural resources royalty payments made to nonresident lessors. The legislation outlines the necessity for this withholding due to the significant loss of tax revenue from out-of-state lessors and establishes a framework for the collection of these taxes. It defines key terms such as "lessor," "natural resource," and "natural resources royalty payment," and specifies that lessees must withhold an estimated tax amount from payments made to nonresidents, with certain exceptions for those receiving less than $1,000 annually.

Additionally, the bill requires lessees to provide annual withholding statements to lessors, file withholding returns, and pay the withheld taxes to the Tax Commissioner. It includes provisions for penalties for non-compliance, establishes rules for electronic filing, and allows for refunds to nonresidents for any overpayment. The effective date for these provisions is set for taxable years beginning after December 31, 2026. 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