West Virginia eliminates business and occupation tax exemption for certain out-of-state-regulated coal-fired power plants

West Virginia Senate Bill 935 removes the business and occupation tax exemption for coal-fired merchant power plants regulated entirely by another state, requiring them to pay tax on 100 percent of their official generating capability starting July 1, 2026. The bill also establishes specific tax recomputation rules, recapture tax provisions for early closures, and transfer rules for units operating under prior tax provisions.

Operators of certain out-of-state-regulated, older coal-fired power plants face increased state tax liabilities starting in mid-2026 by losing a generating-capacity tax reduction, while prior tax-saving elections for other units carry strict recapture penalties if plants close before July 1, 2025.

• ›West Virginia imposes a business and occupation tax on the privilege of generating electricity within the state, with specific statutory provisions governing older coal-fired facilities. context