Senate Eliminates Severance Tax, Cuts REAP Farm Conservation Tax Credit By 50 Percent

An amendment added by the Senate to the Tax Code bill-- House Bill 1531 (George-D-Clearfield)-- that is part of the Budget III agreement, makes a series of changes to the House-passed bill. (click here for new version of the bill)
The amendment eliminates the natural gas severance tax, the tax on small games of chance and a Sales Tax on live cultural performances the House Democrats could not support.
The amendment includes a tax amnesty program, a tax on little cigars, reductions in funding for the Film Development, Education Improvement and other tax credit programs, some by as much as 50 percent, includes a new tax credit for manufacturing helicopter parts and other changes.
A Budget III tax summary is available online.
In another specific change, the amendment makes available only 50 percent of the $10 million in the funding for the Resource Enhancement and Protection (REAP) farm conservation tax credit program in FY 2009-10 ($5 million) and 45 percent in FY 2010-11 ($4.5 million) (page 160 of bill).
There are over $9 million in REAP Tax Credit applications now pending with the State Conservation Commission for this fiscal year.