Gov. Tom Wolf’s proposed severance tax would take Pennsylvania from last place to first among major gas-producing states in taxing the extraction of natural gas, according to the Independent Fiscal Office.
In testimony before a Senate committee Monday, IFO Director Matthew Knittel said the effective tax rate after all state taxes are accounted for would be 7.3 percent. Neighboring states like Ohio and West Virginia levy taxes of 0.8 and 5 percent, respectively, while Texas’ taxes range from 3.1 to 3.5 percent.
“The (proposed) severance tax exceeds West Virginia by about 2 percent due to the tax on volume and the disallowance of deductions for post-production costs,” he said.