Fillable Form Wv/sev-400t - West Virginia Timber Severance Tax

Form Wv/sev-400t - West Virginia Timber Severance Tax - Estimate Page 2

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INSTRUCTIONS

Effective January 1, 2007, Severance tax on timber is imposed on the gross value of the timber at the point the tree is cut and delimbed. The tax is

calculated by multiplying the gross value by the tax rate of .0122. The gross value of the timber is the gross proceeds of sale if it is sold at the point

it is cut and delimbed. Report the gross value on Line 1 of the return. In many instances, there is not a sale of the timber at the point of cutting and

delimbing. In these instances the gross value can be determined in one of three ways.

(1) Use of a value that corresponds as closely as possible to the gross proceeds from the sale of similar products of like quality or character.

(2) In the absence of such sales the gross value may be determined using a cost basis. The value of the timber would be the sum of all costs

attributable to the production of timber, including direct and indirect overhead costs and a reasonable mark-up on the timber. Detailed records

must be kept to support the value used for severance tax purposes.

(3) Use of the percentage method. To apply the percentage method of determining the gross value subject to tax, the timber producer must find

the activity that is similar to his situation, and apply the appropriate percentages to his gross proceeds of sales.

A person who cuts timber and sells it where it is cut and delimbed

Amount received from sale multiplied by

1.00

A person who cuts timber and takes to collection point in woods

Amount received from sale multiplied by