Taxation

Every year that former Pennsylvania Governor Tom Wolf governed, he requested (and was denied) the addition of a severance tax on oil and natural gas production in the Keystone State. The Democrats in PA have insisted, on and off, on slapping a severance tax on top of the existing impact “fee” (i.e., tax) since the Act 13 law was passed in 2012 (see Gov. Corbett Signs New Marcellus Drilling Law). The issue of a severance tax on production came up again at an appropriations committee hearing yesterday in Harrisburg. State Senator Art Haywood, a Democrat from Philadelphia, said drillers are ripping off Pennsylvania and that the impact fee revenue is far less than would be revenue from a severance tax. [UPDATE: We have included a letter sent by the Marcellus Shale Coalition to Sen. Haywood below, setting the record straight.] Read More “Philly Dem Says Impact Fee Ripping Off PA, Wants Severance Tax”

In December, Pennsylvania’s Independent Fiscal Office (IFO), the agency charged with providing revenue projections along with impartial and objective analysis of fiscal, economic, and budgetary issues for the citizens and legislature of Pennsylvania, provided its best guess as to how much revenue the PA impact fee (i.e., severance tax) will generate from shale wells drilled or flowing in 2024 (see PA IFO Predicts Impact Tax Revenue to Drop 9% in 2024). The IFO bases its projections on the number of wells and the assessment for each well according to how many years it has been drilled. The agency that publishes the fees to be assessed for each well is the PA Public Utility Commission (PUC). The PUC published the official list of impact fee charges for 2024 in last Saturday’s PA Bulletin. Read More “PA PUC Publishes Fee Schedule for Marcellus Impact Fee/Tax 2024”

Pennsylvania mineral rights owners (i.e., landowners) now have a well-deserved tax break thanks to a bill passed by the PA legislature and signed into law last summer (see New PA Bill Gives Shale Landowners Same Tax Breaks as Investors). Under Senate Bill (SB) 654, individual landowners receive the same tax benefits afforded to investors. If a company buys mineral rights and the right to receive royalty payments from oil and gas well production, the company, under IRS rules, gets to claim a simple percentage depletion allowance. Essentially, the company only pays income tax on 85% of the royalties it receives. Under SB 654, that same allowance (beginning with taxes filed in 2025 for 2024) applies to landowners in PA. Read More “PA Landowners Get Tax Break for Well Depletion Starting This Year”

Pennsylvania assesses an impact fee (PA’s version of a severance tax) on shale drillers, raising revenues that are paid to local municipalities and the black hole of Harrisburg politicians. Yesterday, the PA Independent Fiscal Office (IFO) issued an estimate for how much the impact fee will raise this year, which will be distributed next year. The IFO says it thinks, based on the price of low natural gas and the number of new and existing wells, that PA will generate $163.8 million from the impact fee in 2024, a decrease of $15.8 million (8.8%) from 2023. Looking back further, the price is down $115.1 million (41%) from 2022. Why did impact fee revenues drop so dramatically over the past two years? Read More “PA IFO Predicts Impact Tax Revenue to Drop 9% in 2024”