EQT Production Co. v. County of Wise

Syllabus

In an appeal from the Court of Appeals' decision to uphold the tax assessment of the taxpayers' mineral lands, the judgment is reversed. The General Assembly has permitted three different avenues for localities to tax mineral lands, they may either: 1) directly assess the fair market value of the entire property pursuant to subdivisions 1 through 3 of Code § 58.1-3286; 2) levy a severance tax based on the gross receipts of all gases extracted from the land lying within the locality pursuant to Paragraph Four of Code § 58.1-3286 and directly assess the fair market value of only the improvements on the property and the undeveloped portion of the property pursuant to subdivisions 2-3 of Code § 58.1-3286; or 3) levy a license tax based on the gross receipts from the sale of gases severed within the locality pursuant to Code § 58.1-3712(A) and directly assess the fair market value of the entire property pursuant to subdivisions 1-3 of Code § 58.1-3286. Here, the County opted to impose a license tax under Code § 58.1-3712(A), and it was obligated to assess the fair market value of the mineral lands pursuant to all three subdivisions in Code § 58.1-3286. As the record establishes that the County failed to assess a critical component of the fair market value analysis without being statutorily excused, its assessment of the taxpayer's property was incomplete and, therefore, plainly wrong. Accordingly, the lower courts' decisions affirming the County's assessment must be reversed. The matter is remanded for further proceedings consistent with this opinion.