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Journal of Property Tax Assessment & Administration

Abstract

Several trends and issues are expected to influence the appraised value of coal property for ad valorem tax purpose. Among these are fluctuations in the price of coal plus environmental regulations on surface mining and CO2 emissions. The process of carbon capture and sequestration creates several issues of its own directly related to ad valorem taxation of coal interests. Other taxes are levied on coal productions as well and their application within the states studied is discussed. While local governments rely on the ad valorem tax, the severance tax is often employed at the state level. In addition, reclamation fees are levied for the purpose of remediating abandoned coal mines and acid mine drainage. Coal interests likewise are subject to the same taxes paid by other businesses in the state where they are located. Finally, the issue of how well the ad valorem tax on coal property complies with the standards of a good tax is explored. The discussion shows that when compared to these standards, the tax on coal property does not equate closely. The reliance of local government on property taxes in coal-producing states means these levies will continue. There is a need, however, for better assessment practices in most states and recognition of the impact that these levies have on the use of coal.

First Page

59

Last Page

77

Keywords

Valuation of mineral properties, Severance tax

Notes

This article is the second of a two-part series exploring the issues in ad valorem taxation of coal-mining properties. The first installment appeared in volume 7, issue 3. This topic was first presented by the author at the International Association of Assessing Officers’ (IAAO) 76th Annual International Conference on Assessment Administration held in Orlando, Florida, August 30–September 1, 2010. The two articles are a condensation of a research report prepared as a requirement for the AAS designation.

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