Screen shot Marshall County officials said the error was triggered by an oil and gas company's late filing of an amendment to its taxes. They added that this was not the first time a state clerical error had cost the county money.

MOUNDSVILLE — The Marshall County Commission raised concerns this week with West Virginia State Tax Division officials over the county losing millions in anticipated tax revenue because of a clerical error at the state level.

County officials said the error was triggered by an oil and gas company’s late filing of an amendment to its taxes. They added that this was not the first time a state clerical error had cost the county money.

West Virginia State Tax Division Supervising Attorney Timothy Waggoner and Division Tax Analyst Brigit O’Neal appeared before the commission to answer questions regarding the matter.

Marshall County Administrator Betsy Frohnapfel said because of the clerical error, both the county and the Marshall County Board of Education are set to lose millions in tax revenue they were expecting to receive from Expand Energy.

“What our concern is our budgets were already complete; $3.7 million is a lot of money. The county commission is set to have to cut $1.5 million out of budget. The rest of that goes to the board of education and is going to have to cut $2.2 million out of their budget,” she said.

“So we have a lot of questions as to how this happened. What was the total amended amount submitted by Expand Energy? What was the justification they submitted as to why this late amended tax came in? We know it’s the purview of your office to accept, approve, deny those. But when it hits us this late and then we’re told we’re going to be asked to do an exoneration, I think the county commission, the assessor and the prosecutor need additional information to understand what category of exoneration this actually fits under, and why they’re doing it and why it came after the period where the numbers were submitted, but actually this year the notification came after our budgets were already submitted to the state auditor’s office.”

Waggoner said Expand Energy’s original appraised value totaled $614,817,708. Its amended return was $314,532,236, a difference of $300,285,472.

He said the original assessed amount would have been $368,890,625 and the amended assessed amount would have been $188,719,342, a difference of $180,171,283 in assessed value.

Waggoner said Expand Energy’s justification for the amended return was that it “left off their post-production cost for gathering, processing and transportation.”

He added the amended return was submitted Feb. 5 and processed Feb. 17.

Waggoner said industries such as oil and gas have a deadline of July 1 to file tax returns and can receive an extension until Sept. 30. He said there is no statute or penalty for filing additional information late.

Waggoner noted the West Virginia Office of Tax Appeals is separate and independent from the West Virginia State Tax Division.

Frohnapfel said such cuts are going to affect the “nuts and bolts of county government.”

“We want to impress upon you … this can’t continue the way it is without hurting the operations of county government,” she said. “The requirements of the county commission is to fund elected officials first. So it’s not going to hit our outside agencies. I’m not saying the fire is coming yet, but it’s going to hurt our volunteer fire departments. It’s going to hurt our senior centers, our animal shelters. That’s who is going to get cut before the elected officials do because that is the code and we get held to the fire. Evidently, the industry does not.”

Commission President Scott Varner, a former majority whip in the West Virginia House of Delegates, said he hopes a change is coming in the state Legislature to address the issue of late filings.

“I would also hope that, again, knowing how the Legislature works, there’s always agency bills. I would hope the secretary of tax and revenue would go to the speaker and the senate president and say, ‘Look, we’re killing counties with these late filings, claims, etc., we’ve got to pass a bill that imposes some level of penalty to the company that holds their feet to the fire to make these things timely,'” Varner said.

“It’s not only am I concerned about values, but I’m concerned about timeliness when we try to do our work and our feet are held to the fire if we don’t do our work on time.”

Frohnapfel said this is not the first time a clerical error in the state tax office has cost the county revenue.

“You have to understand on our end since 2021 there has been a clerical error out of the state tax office that has cost Marshall County millions every year,” she said.

Waggoner apologized, adding that the department’s goal is to be accurate.

Commissioner John Gruzinskas said he wanted to know how the state planned to remedy the situation so the same error would not happen again.

Waggoner said that without a new law regarding penalties, he did not see a solution.