Payment In Lieu of Property Tax
Coal Conversion Facilities
The coal conversion facilities privilege tax is imposed monthly on electrical generating plants that have at least one generating unit with a capacity of 10,000 kilowatts or more, other coal conversion facilities that consume 500,000 tons or more of coal per year, and coal beneficiation plants. It is in lieu of property taxes on the plant itself, but the land on which the plant is located remains subject to property tax.
Electrical generating plants are subject to a tax of .65 mill times 60% of the installed capacity of the unit times the number of hours in the taxable period, plus a separate tax of .25 mill on each kilowatt hour of electricity produced for the purpose of sale. A new or repowered electrical generating plant is exempt from the state’s share of the tax for the first five years of operation, and the board of county commissioners of the county in which the plant is located may exempt the plant from all or part of the county’s share for up to five years.
All coal conversion facilities other than electrical generating plants are exempt from 85% of the tax for the first five years of operation. The board of commissioners of the county in which the plant is located may exempt the plant from all or part of the remaining 15% for up to five years.
For coal gasification plants, the tax is the greater of 4.1% of gross receipts or 13½ cents on each 1,000 cubic feet of synthetic natural gas produced for the purpose of sale, but not including any amount of synthetic natural gas in excess of 110 million cubic feet per day.
For coal beneficiation plants, the tax is 20 cents on each ton of beneficiated coal produced for the purpose of sale, or 1¼% of gross receipts, whichever is greater.
For all other coal conversion facilities, the tax is 4½% of gross receipts.
