More on Wolf’s New 6.5% Severance Tax – What Could of Been

A quick update on the new, higher severance tax being proposed by Pennsylvania Gov. Tom Wolf in his second budget (the first budget never passed and the state has survived on continuing budget resolutions). We reported yesterday that the new 6.5% severance tax would be “on top of” the existing impact fee. That may have left a wrong impression. Yes, the impact fee, which is already high, would remain. But drillers would be able to deduct the impact fee from the 6.5% severance tax, lowering the severance tax for them. It still works out to a 6.5% rate–ON TOP OF corporate income taxes these companies pay. Meaning Wolf’s new severance tax would be one of the highest in the country, if you include corporate income taxes paid by drillers (income taxes that don’t exist in other oil & gas states). In addition to more comment on Wolf’s proposed severance tax, we also have some inside scuttlebutt about the severance tax and what could have been had Wolf not blown it last year…

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