2017-05-17 / Front Page

EQT’s late tax payment helps court, schools

By SAM ADAMS

County government, county schools and Jenkins Independent Schools and special taxing districts, all strapped by sharp decreases in unmined minerals taxes and severance taxes, got a windfall last week after an apparent change in the property tax assessment for EQT Gathering.

According to documentation from the state Department of Revenue, Letcher County Schools received $1,041,152 in unexpected revenue from EQT; Letcher County Fiscal Court received $230,097; Jenkins Schools received $90,486; Letcher County Public Libraries received $206,052; Letcher County Health Department received $134,755; Letcher County Extension Service received $154,704, and Letcher County Soil Conservation received $17,314.

The taxes are property taxes on real property, personal property, and business equipment.

County Judge/Executive Jim Ward said the money comes from 2015 taxes that were unpaid because the company was disputing the state’s assessment of its property. Ward said EQT had reported its gathering lines and main pipelines as manufacturing equipment, which is taxed at a much lower rate, for at least three years, but he was unsure whether any additional money would be coming for the other years.

Department of Revenue spokesman Glenn Waldrop declined to comment on the EQT settlement specifically.

“We cannot comment specifically on any settlement resolutions,” he said. “However, protest resolution settlements are common occurrences in dealing with annual assessments. Assessments can vary from year to year, based upon the information provided annually when a public service company’s return is filed.”

Ward said in addition to the change in assessment, some of the property in Letcher County had been listed as being in Pike County.

“We are checking to see if any of the other companies are doing the same kind of thing,” Ward said.

Letcher County Superintendent of Schools Tony Sergent said he was “tickled to death” that the school district received the check, but his enthusiasm was tempered by the fact it is a one-time payment, and not ongoing revenue.

“It’ll help offset the money that we lost, but that’s a one-time shot,” Sergent said. “The money we lost will be gone forever. Unmined mineral tax is never coming back.”

Mineral tax bills to be paid to the county school district fell more than $1.2 million this year.

An EQT spokeswoman could not be reached for comment about the tax situation.

EQT has also been involved in assessment disputes in other states, notably Virginia, where the company sued Wise and Dickenson counties in 2012 seeking a $20 million refund of taxes dating back to the 1990s.

The company was among those that threatened to sue Letcher County if the fiscal court passed a business license on extractive industries that would have raised about $4 million for the county, much of it from the natural gas industry.

Gas property taxes in Letcher County, which are assessed by the Kentucky Department of Revenue, dropped by more than half this year, but the reasons are unclear.

EQT owns gas and oil wells, minerals rights, gathering lines and compressor stations in Pennsylvania, West Virginia, Kentucky, Ohio, Virginia, Maryland and Texas. The bulk of its production is in Pennsylvania and West Virginia, where the company drills in the Marcellus shale, however it has more active, productive wells and more acreage in Kentucky than any other state. According to EQT’s latest annual report to the Securities and Exchange Commission, the company operates 5,720 gross productive wells in Kentucky, and owns 1.5 million gross acres of gas lands, of which 471,055 acres have been developed with wells. At 1,156 billion cubic feet of proved reserves, EQT’s Kentucky holdings are less than half those in either West Virginia or Pennsylvania, but about seven times its reserves in the other four states combined.

EQT reported a first quarter net income of $164 million. Production sales were up 6 percent, averaged realized price was up 33 percent, and the company had a cash balance of $857 million.

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