West Virginia Court Upholds Tax Commissioner’s Valuation of Oil, Gas Royalties

The West Virginia Intermediate Court of Appeals affirmed the Office of Tax Appeals’ decision upholding the State Tax Commissioner’s ad valorem property tax assessments for oil and gas royalty interests. The case involved taxpayers who challenged the valuation method used by the Tax Commissioner for their royalty interests in natural gas wells. The court found that the yield capitalization model mandated by the West Virginia Legislature for valuing oil and gas properties complies with the state law’s “true and actual value” requirement. Furthermore, the court determined that the taxpayers failed to prove, by a preponderance of the evidence, that the ...