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Statoil Tax Dispute in West Virginia Sent Back to County Courts

A judge on the West Virginia Supreme Court of Appeals ruled that a dispute between a unit of Norway's Statoil  ASA and four counties over nearly $7 million in property taxes the company claims it overpaid must be handled in the county court system.

In a recent ruling, Chief Justice Menis Ketchum wrote that the tax appeals involving Statoil USA Onshore Properties Inc. "are not complex and do not require specialized treatment to improve the expectation of a fair and reasonable resolution, and, therefore, these cases do not meet the criteria for referral" to the high court's Business Court Division.

Statoil had filed four separate lawsuits against officials in Brooke, Marshall, Ohio and Wetzel counties over $6.68 million the company said it overpaid in property taxes for 2015.

According to court records, Statoil contends that it discovered that it sent erroneous data to a third party operator for its "take-in-kind" interest, under which the company receives a portion of natural gas produced by a well's third party operator. Statoil lodged complaints with all four counties last February.

The company said it is entitled to $2.9 million in tax relief from Ohio County. It also contends that Brooke County owes it $1.8 million, Wetzel County owes $1.6 million and Marshall County owes $342,000.

Ketchum's ruling was forwarded to the chair of the Business Court Division, judges with the state's First and Second Judicial Circuit courts and clerks from the four counties.

Last July, the Marshall County Commissioners denied Statoil's request for a refund by a vote of 2-1. Although state law does permit refunds for clerical errors such as the ones described by Statoil, the West Virginia Tax Department told the commissioners that the company's miscalculation was a matter of negligence.

Statoil agreed to sell all of its operated properties in the state to EQT Corp. for $407 million last May. The company still holds 350,000 non-operated acres in West Virginia and Pennsylvania.

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