                                 CODE OF VIRGINIA

COUNTIES AND CITIES AUTHORIZED TO LEVY SEVERANCE TAX ON GASES (§ 58.1-3712)

A. The governing body of any county or city may levy a license tax on every
person engaging in the business of severing gases from the earth. Such tax shall
be at a rate not to exceed one percent of the gross receipts from the sale of
gases severed within such county. Such gross receipts shall be the fair market
value measured at the time such gases are utilized or sold for utilization in
such county or city or at the time they are placed in transit for shipment
therefrom, provided that if the tax provided herein is levied, such county or
city cannot enact the provisions of &#xA7; 58.1-3286 relating to a tax on gross
receipts. In calculating the fair market value, no person engaging in the
production and operation of severing gases from the earth in connection with
coal mining shall be allowed to take deductions, including but not limited to,
depreciation, compression, marketing fees, overhead, maintenance, transportation
fees, and personal property taxes.

B. Notwithstanding any other provision of this section or law, for purposes of
calculating the fair market value of gases severed in Buchanan County, except as
otherwise provided in a settlement agreement regarding the calculation of fair
market value, including deductions for transportation and compression costs,
between the County and the taxpayer, no person engaging in the production and
operation of severing gases from the earth in connection with coal mining shall
be allowed to take deductions, including but not limited to, depreciation,
compression, marketing fees, overhead, maintenance, transportation fees, and
personal property taxes.

C. Any county or city enacting a license tax under this section may require
producers of gas and common carriers to maintain records and file reports
showing the quantities of and receipts from gases which they have produced or
transported.

D. The commissioner of the revenue of any county or city is authorized to enter
into agreements with any taxpayer pertaining to the calculation of the fair
market value of gases under this section. All such agreements entered into on or
after January 1, 2013, but prior to July 1, 2014, between the commissioner of
the revenue of any county or city and any taxpayer are deemed bona fide and are
valid and enforceable.

HISTORY: Code 1950, § 58-266.1:1; 1973, c. 522; 1976, c. 53; 1984, c. 675;
2002, c. 433; 2009, c. 770; 2013, cc. 305, 618; 2014, cc. 48, 179.