WV Severance Tax Higher than Projected – But Maybe Not for Long

There’s some good news and, depending on your perspective, bad news when it comes to severance tax collections from natural gas (and coal) in West Virginia. According to West Virginia Department of Revenue in a report released last week, severance tax collections on oil, gas and coal in the Mountain State exceeded revenue projections by $13 million for the first nine months of the current 2017 fiscal year. The surplus reverses the trend from the previous year when WV lost severance tax money due to the drop in the price of oil and gas. Severance tax revenue, as we’ve pointed out before, floats up and down with the commodity price of oil and gas, unlike impact fee revenues which are much less tied to commodity prices (and one reason why PA drilling flourishes). So WV is seeing higher severance tax revenue–that’s the good news. The “bad” news is that Gov. Jim Justice and the WV Senate plan to cut the severance tax–putting the state back in the position of doing more with less…

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