(1) For purposes of the coal severance tax, the department may, or shall at the request of the taxpayer, impute the value of coal which has been refined by drying, cleaning, or other processing designed to improve the quality of the coal.   Refined or refining does not include transportation of the coal from the point of extraction to the point of shipment or to the boiler, nor any normal preparation process leading to shipment of coal.

(2) The imputed value of refined coal will approximate market value FOB mine of similar type coal after primary and secondary crushing where drying, cleaning, or other further processing has not occurred.   The FOB mine price of similar type coal is the price of such coal as established by the market price reflecting the selling price of coal with like characteristics within the region, as determined by spot sales or other methods reflecting the market value of unrefined coal at the time the sale of refined coal occurs.

(a) Example:   Refined coal is sold for $12/ton.   The FOB price of similar type coal where drying, cleaning, or further processing has not occurred is $10/ton.   The imputed value is $10/ton.