What is the Black Lung Excise Tax, and why is it important?

West Virginia News

CHARLESTON, WV (WVNS) — Senator Joe Manchin saying he would not support President Biden’s ‘Build Back Better Plan’ also come with a denial of a four-year extension of the Black Lung Excise Tax that was included in the bill. But what is this tax and why is it so important?

According to the Appalachian Citizens’ Law Center, the Black Lung Excise Tax rate has been nearly cut in half, affecting miners across the country. Gary Hairston, President of the National Black Lung Association is worried about how the recent cut will impact miners, especially in West Virginia.

“Now that the excise tax has fallen in half, we are worried about what the implications could be for the future of benefits including the possibility of jeopardizing the availability of benefits or impacting our healthcare one day. We plan on reminding Congress how important our benefits are to the state of West Virginia and miners reliant on these benefits and hope to see an extension passed soon,” Hairston said.

What is the Black Lung Excise Tax?

According to the Congressional Research Service (CRS), the Black Lung Benefits Act was enacted in 1977, by Congress, to compensate miners with pneumoconiosis more commonly known as black lung disease. The CRS said the purpose of this Act is to provide benefits to coal miners who are totally disabled due to black lung and to the surviving dependents of miners whose death was due to such disease

Section 4121 of the Internal Revenue Code says there is an excise tax on domestically produced coal. The taxes collected on the sales of coal are deposited to the Black Lung Disability Trust Fund to finance black lung benefits to affected miners.

According to the CRS, producers of coal in the U.S. are liable for the tax with the first sale or use of the produced coal. The tax is imposed as two rates, depending on if the coal is from underground or surface mines. The IRS said the tax on deep mined coal is the lower $1.10 a ton or 4.4 percent of the sales price. The tax on surface mined coal is the lower of $.55 a ton or 4.4 percent of the sales price.

The CRS also said the primary source of revenue for the Black Lung Disability Trust Fund is the excise tax. If the excise tax is not enough to fund the benefits, the trust fund may borrow from the general fund of the Treasury.

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