Severance Tax

One of the reasons that natural gas and oil development has been able to thrive and be such a benefit to the people and the economy of Pennsylvania is through smart and forward-looking governmental policy. This includes a system of taxation on the industry that permits progress and growth, but that also helps to responsibly fund the key functions of state and local governments.

Governor Tom Wolf continues to propose severance taxes on the natural gas industry that could do real damage to the great success story of natural gas development in Pennsylvania.

Right now, with our current system of taxation, the natural gas and oil industry pays more taxes than any other Pennsylvania business – first, the income and other taxes that all business pay, plus an additional impact fee that is unique to the energy industry. Adding an additional tax on top of what the industry is already paying will make the cost of doing business in Pennsylvania higher. And that will risk driving the energy industry, which has done so much to benefit our state, elsewhere.

While it’s true that Pennsylvania is home to incredible stores of natural gas and oil, we aren’t the only state with those natural resources. Irresponsibly raising the costs of doing business here will make us less competitive nationally and will push natural gas and oil companies to consider relocation to other, more affordable locales.

If that were to happen, Pennsylvania would not only lose out on the economic activity that the natural gas and oil industry drives, but also on the tax revenue that the industry currently pays.

As the old saying goes, if it ain’t broke, don’t fix it. Pennsylvania has a system of taxation that works well for everyone in our state. We should keep it that way.