The state of West Virginia's energy severance tax collections have increased by 23 percent during the last six months, showing the current strength of the energy market.
State Tax Department Revenue Expert Mark Muchow says the state ended the fiscal year Monday with approximately $3.9 billion in overall tax collections, which is nearly $109 million above original estimates.
Muchow says much of the tax base growth can be credited to the current prices of coal and natural gas.
Muchow says a year ago a ton of coal was selling for $45 on the spot market, but now it's more than $100 a ton. The higher the spot market price, the more tax revenue collected by the state.
Metronews, July 1, 2008-- The state of West Virginia's energy severance tax collections have increased by 23 percent during the last six months, showing the current strength of the energy market.
State Tax Department Revenue Expert Mark Muchow says the state ended the fiscal year Monday with approximately $3.9 billion in overall tax collections, which is nearly $109 million above original estimates.
Muchow says much of the tax base growth can be credited to the current prices of coal and natural gas. Muchow says a year ago a ton of coal was selling for $45 on the spot market, but now it's more than $100 a ton. The higher the spot market price, the more tax revenue collected by the state.
Muchow says other sections of the state's revenue picture indicate a struggling national economy. He says Corporate Net Income Tax collections are down nine percent the last three months and Interest Income Tax accounts are down more than 38 percent the last four months.
However, according to Muchow, because of energy, West Virginia has a healthier revenue picture than most of its surrounding states. "A good part of the gains are inflationary type gains, but the inflation is so far confined in large part to the energy sector, which is always good news for West Virginia," Muchow said.
Most national economists are predicting slow growth for the months to come in most sectors of the economy, with the exception of energy.
Muchow says the state is collecting more taxes because of energy prices, but he says state residents are buying less. He says the Consumer Sales Tax and Use Tax were down a combined $47 million during the past year.
The state won't know how much in the black it ended the fiscal year until sometime in early August. Muchow says it will take that long to process all of the expenditures from the last few weeks of the budget year.