Independent Fiscal Office: Wolf’s Severance Tax Has Highest Rate In Nation, Nothing For The Environment

An Independent Fiscal Office evaluation of Gov. Wolf’s proposed natural gas severance tax found it to have the highest effective lifetime tax rate of any severance tax in the country-- 7.4 percent at the wellhead, after the deduction of the existing Act 13 impact fees.

The IFO said the existing Act 13 impact had a much lower effective tax rate of 1.1 percent at the wellhead.

The proposed severance tax would generate about $217.8 million in FY 2016-17, but none of the money is proposed by Gov. Wolf to go toward environmental programs.

The existing Act 13 impact fee is projected to generate $127.6 million in FY 2016-17, down from $185.5 million in FY 2015-16 and $223.5 million in FY 2014-15 as significant percentage of which goes to state environmental restoration programs and some local environmental work.

A copy of the IFO report is available online.

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Wolf’s Proposed Severance Tax Among Nation’s Highest