Legislation has been introduced in the Pennsylvania General Assembly to impose a natural gas severance tax. Severance tax is a state tax imposed on the extraction of non-renewable natural resources that are intended for consumption in other states.
The Pennsylvania Department of Community and Economic Development (DCED) commented that Pennsylvania is the second-largest producer of natural gas in the country and will likely overtake Texas as the top producer in a few years. However, despite this, the DCED noted that Pennsylvania is the only gas-producing state that does not impose a gas severance tax.
Details of the Legislation
- S.B. 183 would impose a natural gas severance tax on each unconventional gas well at 5% of the gross value of units severed at the well head per reporting period.
- S.B. 468 would also impose a 5% natural gas severance tax on unconventional gas wells, but would also repeal the unconventional gas well fee.
The bills are in committee in the Senate. S.B. 183, as introduced in the Pennsylvania Senate on February 1, 2019; S.B. 468, as introduced in the Pennsylvania Senate on March 21, 2019; News Release, Pennsylvania Department of Community and Economic Development, June 10, 2019