Oct. 18, 2017
Proposal would make PA’s tax system more fair and competitive
HARRISBURG – Rep. Michael Corr (R-Montgomery) joined other state House Finance Committee members in a bipartisan vote today to approve legislation that would enact a severance tax on natural gas production in the Commonwealth. Revenues collected as a result of the tax would be deposited into the General Fund.
“Because of the leadership of Republicans on the committee, the Commonwealth is one step closer to ensuring that natural gas producers pay their fair share in taxes to support programs that protect our environment,” Corr said. “I was proud to vote in favor of the bill to bring Pennsylvania more in line with what other states are doing in terms of taxing natural gas produced within the Commonwealth.”
Pennsylvania currently is the only major natural gas-producing state without a traditional severance tax, which this bill would address.
House Bill 1401 would impose an incremental severance tax based on the average annual market value of natural gas in addition to the current per-well impact fee. The tax would apply to unconventional gas wells that are also subject to the state’s impact fee.
“By tying the severance tax rate to market value, we ensure that a high tax rate would not punish the industry during an anemic year,” Corr said. “With this approach, we would maintain the value of natural gas that can be harvested in Pennsylvania while providing needed recurring revenue for the state.”
The severance tax would not replace the impact fee, so local governments that currently receive a portion of the impact fee revenue would continue to receive that important funding.
“We have an opportunity to make our tax system fairer and help balance future state budgets,” Corr said. “This is an example of what can happen when we look for innovative solutions and work together to do what is best for the Commonwealth.”
House Bill 1401 would include safeguards for landowners and leaseholders in natural gas-producing regions, by ensuring that producers may not pass on the severance tax.
The bill now heads to the full House for consideration.
Rep. Michael Corr
150th Legislative District
Pennsylvania House of Representatives
Media Contact: Dan Massing
717.772.9845
dmassing@pahousegop.com
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