The coal producers, which filed the lawsuit in 2003, are hoping the Supreme Court will rule taxes on export coal are unconstitutional after a Kanawha County Circuit Court earlier ruling found the taxes legal.

The coal companies argue the tax on export coal violates the import-export clause of the US Constitution, which prohibits states from imposing tariffs or duties on imports or exports, Associated Press reported.

The original lawsuit was filed at a time when the coal industry was in a downturn as exports moving through Virginia ports declined from 58.5 million tons in 1991 to 24.2 million tons in 2000. Producers argued the severance tax made export coal uncompetitive and impacted negatively on the industry.

Companies involved in the action include Alpha Natural Resources, Arch Coal, Consol Energy, Foundation Coal Holdings, International Coal Group, Massey Energy and PinnOak Resources.

The severance tax is generally calculated at a rate of 5% of the sales price, which the companied argued constituted a sales tax and therefore violates federal law.

The producers said the relevant statutes equate the month in which the taxes 'accrue' with the month in which the coal is sold.

The Tax Department disagreed saying severance taxes were distinct from other taxes, and are entitled to special consideration.

"Severance taxes hold a rather unique place in the pantheon of taxes, because of the one-time nature of the thing being taxed," the government attorneys said.

State government collects 93% of the total severance taxes, while 7% is redistributed to counties and municipalities.