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Coal Companies Being Shut Down Over Taxes
I read this on another forum and wonder if anyone has heard anything on this, sounds like Obama is already coming after the coal companies like he said during his campaign.
"I'd do a media link on this but I doubt there is any for this is so slick and devious, its hard to believe. I haven't figured out the actual motives but definitely its shutting coal mining industry down in the state of KY.
Earlier this month, I get a call telling me the large coal company two of my family has worked for was closing its doors. I won't mention the name out of fairness to their stock, but this is one major company with a lot of holdings. I didn't think much of this since the economy is down and coal once at a very high price now selling much lower.
Last night, it all comes together as I hear from family in rural KY. Apparently the Democratic controlled state is using obscure $3 tax bill from 1995 to apply it's fine print clause which says they can deem mineral rights as real property and it does in fact belong to the seller until final payment is made.
This is a major big deal which can and will have a major impact on all of us.
How much coal is in KY has long been something that has been pretty much identified. When people think of coal, they think of mining but it by far is just a very small part of the coal financial system. Entire fortunes have been made over the years by buying and selling in "Coal Leases" or "Mineral Rights".
The way owning 'Mineral Rights" works is the buyer buys the deed to the minerals on someone's property thus he now owns it and if its taken out of the ground, he keeps all the profit. A coal lease, the land owner is paid a very small annual sum to give the buyer first option to take the coal out of the ground and the seller only receive any money of significance when and if that coal is taken out of the ground.
It's this lease the Democratically controlled government in the light of the Obama Administrations "Carbon Cap" effort it now seeing as actual property and taxing as property value.
Up until now, a mineral was not considered to have value unless someone takes it out of the ground. With all the anti-strip mining legislation some of this coal may never be taken out of the ground. Imagine having a $200 lease then finding out you have to pay taxes on $200,000 that's still in the ground?
Now I will put this in simple terms.
The old retired couple living in the little farm in the middle of nowhere is approached by the coal companies, just like the one I mentioned in this post, to sell them their coal lease. They are told, they'll get a whopping $200 a year for that lease. That's about a average price too. Now if the company ever takes the coal out, then they stand a chance to receive much more money but its only a chance. Now the state is saying that coal is worth the total amount of the worth of the coal that's under that ground and the old folks on fixed income are hit with a $3,000 annual tax bill. If the old couple can't pay the bill then the lease goes to the state for back taxes.
What this means to coal companies is just horrific. Coal companies not only buy leases but also own a lot out right mineral rights. Mineral rights are just like leases in that they aren't worth anything really unless the coal is taken out of the ground. Now these companies are faced with paying property tax on those mineral rights like it was a tangible asset. Depending on how large a company, their annual tax bill could be enormous or they loose their mineral rights to the state for back taxes.
No wonder the coal company my relatives worked for is closing their doors. They're going to lose all their mineral rights based on what may be under the ground despite it not being worth anything unless its taken up out of the ground and how they can take it out of the ground controlled by the state.
My God, this makes Al Capone look like an amateur."
The Democratically controlled state of KY has their own version of "Carbon Cap" now and they're starting at the source not the power companies. This is nothing more than a state coal grab or mineral rights grab that makes the carpet baggers of old getting rich off the poor in Eastern Kentucky look like child's play.
Now when you think about how few people there are in E. KY, this plan is pure genius because they really don't have the political clout to fight this. When you think of what impact every one of us who use coal indirectly as electricity, its down right scary. If this goes down, over time, all the coal in KY will be owned by the state.
This is the same as the state coming to your home and saying there is minerals under your property worth X amount of dollars and you have to pay property tax on it, whether there is or isn't nor whether it can ever be taken out"
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