Ohio’s Oil and Gas Severance Taxes
Ohio can have it all – more jobs, decreased energy costs, increased tax revenue and tax cuts – but first we need companies to invest in the state to help it grow.
The Utica shale play is currently in its infancy. To date, there are a total of seven wells producing crude oil and natural gas in two counties. It will take a couple of years to determine the economic viability of this shale formation. This investment capital is mobile. If the cost of doing business here in Ohio is too high, then companies will take their investments somewhere else.
Increasing the current Ohio oil and gas severance tax rate would discourage such investments. For example, a 4% severance tax on oil and gas would be equivalent to a 40% income tax and 16 times more than the commercial activities tax (or CAT). It would also burden economically challenged area throughout the state and landowners who want to lease their land and receive royalty streams.
Finally, state and local governments under the current tax code are projected to receive more than $1.05 billion in new tax collections beginning in the year 2015 because of oil and gas development.
Ohio Oil and Gas Severance Tax Information: