photo by: Joselyn King

Marshall County commissioners Mike Ferro, left, Scott Varner and John Gruzinskas confer during Tuesday’s commission meeting.

MOUNDSVILLE — It was money Marshall County officials explained “never existed,” and Tuesday county commissioners denied the State Tax Department’s request for extra assessments in the county where the state had undervalued natural gas wells.

All is now “status quo,” and the taxpayers affected don’t have to pay additional dollars on their well revenue, according to county officials. Approximately $5.3 million “that never existed” was due Marshall County, but was never budgeted.

The commission had the choice to accept the Tax Department’s request for relief from erroneous assessment, putting the burden to recover those millions of dollars on the commission by assessing well owners, or reject the request and forfeit the money. Marshall County commissioners chose the latter.

It was revealed last month that eight natural gas-producing counties in West Virginia were due an additional $30 million in property tax revenue after an alleged “clerical error” caused the State Tax Division to submit property tax valuations for first-year producing wells that were undervalued.

Many well owners had received letters stating they would be assessed additional money, but not all of the property owners were notified. Representatives from the Marshall County Sheriff’s Department explained they sent out notices in late 2023 to taxpayers as directed by the state Tax Department.

A hearing to discuss the situation was convened at the Marshall County Courthouse on Tuesday

“The Tax Department made erroneous assessments to our taxpayers. They (property owners) thought they had paid their taxes, then all of a sudden in March of 2023 they (the tax department) discovered they made a mistake,” Commission President Mike Ferro explained. “According to our assessor, they did not let counties know this until September 2023 that we would have to supply the tax slips for these people to be taxed accordingly.”

Ferro said he believes the State Tax Department handled the situation “horribly.”

“They wanted to call it a clerical error, I think it was just pure negligence on their part,” he continued.

None of the $5.3 million in extra revenue expected to be collected from the well owners was ever budgeted by the county, according to Ferro. He noted 70% of the money would have gone to Marshall County Schools, but that school officials were on board with the county denying the request.

“We’re the ones biting the bullet at the expense of our people, but the Tax Department are the ones who made the mistake,” Ferro said.

He added the State Tax Department “needs to get its act together.”

County Assessor Eric Buzzard estimates 42 wells and the accounts of about 2,800 county residents would have been affected by the move toward additional taxation.

“It was the negligence of the state Tax Department that caused this meeting today,” Buzzard continued. “I’m happy to see the commission deny their request.”

Buzzard pressed Deanna Sheets, director of the State Tax Division, as to why her department discovered the error in March 2023 but didn’t notify county assessors of the “clerical error” until six months later in September.

“If we had known, the numbers could have been corrected. We would not have sent out the letters, and we wouldn’t be here today,” he said.

Sheets responded with some explanation.

“It was more toward the end of March 2023 that we discovered there was something — that we were notified something was going on. It was actually by the end of May that we had it narrowed down that it could possibly have something to do with the first-year wells,” she said.

“Once we verified that with our legislative auditor, we met with him and ran through calculations to determine what it was. Then on July 31, 2023, we emailed all eight assessors of the affected counties with their potential members and their effects.”

The department next prepared documents informing well owners “your value was this, it should have been this,” she continued.

“It said we made an error in valuing property as required under state law in accordance … and it is our obligation to bring that valuation to you,” Sheets said.

“We got the information out as soon as we could, and it was a cumbersome process. Many of these wells have hundreds and hundreds of owners.”

Sheets also prognosticated that well values would continue to rise in the coming year as production is expected to increase.

The assessments that are provided by the State Tax Departments are based on production numbers provided by the oil and gas companies, she added.

A handful of well owners spoke during the hearing on Tuesday.

Neil Patterson asked who is checking on the producers to see if they are providing accurate figures. No explanation was provided.

Shermaine Mager said while she is one of 10 relatives mutually owning a well, only three of the family members received notification of the taxation error and the potential for additional taxation.

“We don’t get what people think we get. We pay more taxes than anybody,” she told those present.

She predicted extreme measures if the commission accepted the State Tax Department’s request for additional taxation.

“If so, we will all have to sell,” Mager said to applause. “I refuse to do so and lose what my great-great grandfather did for me.”

The county most affected by the State Tax Department’s error was Tyler County, which stood to collect an additional $15.8 million. Tyler County Commissioners have also rejected the department’s request for additional taxation.

Marshall County, at $5.3 million, was second on the list, followed by Brooke County at $4.4 million; Monongalia and Wetzel counties at $1.6 million each; Doddridge County with over $1 million; Harrison County at $275,879; and Pleasants County at $110,277.