Washington State was forced by a lawsuit filed by coal companies in Wyoming and Montana to drop a sales tax exemption for coal purchased for use as fuel in power plants. The exemption could only be claimed by power plants using at least 70% local coal. Local coal meant coal from the local county or a contiguous county. The lawsuit charged the exemption was an unconstitutional drag on interstate commerce. The state legislature decided to drop the 70% requirement rather than fight the suit.
Meanwhile, the Kentucky legislature voted in March to provide tax credits of $2 a ton for each additional ton of Kentucky coal that coal utilities burn above a base. Another bill provides tax exemptions for new coal-fired power plants built in coal counties.
