Poll Question: Do You Support The Severance Tax ?
I posted this question to the members of USA, but I'd like to know how the GMS membership feels ?
I will send the results to the Governor, President of the Senate, Speaker of the House, and appropriate committees.
Answer this thread yes or no, or send me a PM.
Do You Support The Severance Tax ?
Thanks, Mark
Views: 5689
Replies to This Discussion
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Permalink Reply by Bluflame on
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Tony,
The current severance tax in Ohio is .25% versus 1%. Therefore, Gov Kasich's latest proposal of a 4.5% severance tax represents an enormous increase.
BluFlame
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Permalink Reply by Tony Yurina on -
Thanks Bluflame.
My recall for the 1% was a year old, when gas was hovering around $2 +/MCF
My stripper well royalty check, has more than 0.25% being deducted. I need to check the Ohio Revised Code.
$0.025 cents/MCF is your answer. At $4/MCF gas, that is around 0.50%.
See ORC below.
5749.02 Imposing tax on severance of natural resources.
(A) For the purpose of providing revenue to administer the state's coal mining and reclamation regulatory program, to meet the environmental and resource management needs of this state, and to reclaim land affected by mining, an excise tax is hereby levied on the privilege of engaging in the severance of natural resources from the soil or water of this state. The tax shall be imposed upon the severer and shall be:
(1) Ten cents per ton of coal;
(2) Four cents per ton of salt;
(3) Two cents per ton of limestone or dolomite;
(4) Two cents per ton of sand and gravel;
(5) Ten cents per barrel of oil;
(6) Two and one-half cents per thousand cubic feet of natural gas;
(7) One cent per ton of clay, sandstone or conglomerate, shale, gypsum, or quartzite;
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Permalink Reply by Bluflame on
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Thanks Tony....So at the administration's latest proposal, assuming the same $4/MCF gas, the tax would be $.18/MCF. And assuming a $90/barrel price for oil/condensate, the tax would be $4.05/bbl.
I wonder how they'd treat NGL's?? Under any circumstances, those are staggering increases over today's numbers.
BTW...does your lease (which I assume is old since you mention stripper wells) call for the lessee to pay the severance taxes? As I mentioned earlier, my relatively new lease (~2 yrs old) does place severance tax payment burden on the lessee.
IMHO...any increase is DOA for the new two-yr state budget taking effect 7/1, but could resurface as a ballot referendum. In that case, all bets are off since Utica lessors represent a small minority of Ohio voters. Frankly, I'm surprised the state legislators resoundingly rejected the increased severance tax. Hats off to the Ohio Oil & Gas Association, and their effective lobbying.
BluFlame
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Permalink Reply by Mark Yurina on
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Yurina Jr. votes "NO" as well.
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Permalink Reply by 2z248p19vqnh9 on
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PA., but I say NO. Hate to see a OH/PA *Gas/Oil Party...but, if that is what it takes...STAND. He who stands Firm.
As one light lights another, nor grows less - so nobleness enkindles nobleness. ENDEAVOR.
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DO talk to God Himself - He does have ALL of the answers, friend, momoney...money can't buy you love...only a dish of egg foo young & a sweet pair of blue suede shoes...ENDEAVOR.
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Careful Frank - you'll get these people SO worked up over Chinese food that they'll start ROLLING in it vs. eating it. I'll bet they actually contemplate WHICH side of the egg roll to begin with...maybe they just start at the middle. Middle of the Road...?
Whatever - I don't think that half of these good folks would really see the difference of having Chinese crammed down their throat OR rolling around in it like 'pigs in their own feces'. Pickled Pigs Feet with some casu fra'zigu? To each their own...
They won't know what to DO without their 'blue suede Saudi shoe' laces being knotted together. That's ok, gotta' trip over something, eh?...might as well fall on your face when trippin' over your own TWISTED LACE & cut off your nose to SPITE YOUR FACE. Make no haste - hear ye', HEAR YE'! Haste makes WASTE!
As one light lights another, nor grows less - so nobleness enkindles nobleness
.James Burke Connections #6 - Thunder in the Skies - YouTube - watch this, folks, explains HOW Maybach/Daimler created the CARBURETOR...THUS giving birth to the usable 'horseless carriage'.
LIKE the saying, "Don't tread on me."...a good phrase for 'today':
"Don't pull the 'poop-ola' over my eyes." (GG 6.8.2013, Sat) Butt Naked Worker Greets Me At New Compressor Station - YouTube ***MAYBE THAT is what this young buck was trying to do to Scroggins! Ho-Ho. ***POSTER CHILD for the G/O field-day show? -- -- Coming to a field near YOU!
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I do not support the INCREASE in severance taxes.
I believe everyone missed AJ's post on the third page. Ohio already collects severance taxes on oil and gas. They always have as long as I can remember.
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Permalink Reply by Bluflame on
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Mark,
Allow me to be "Devil's Advocate". I think Gov. Kasich's 4.5% severance tax proposal is excessive. However, I could support a smaller tax (say 2.5%) if the Kasich regime would submit as part of the proposal a convincing dollar-for-dollar reduction in the state income tax. Therefore, the new tax would be revenue-nuetral. This scheme should be formula-driven so annual collections from the severance tax would be applied either as a credit to individual state income tax payers for that year, or a reduction in rates for the succeeding year. Both options would be calculated based on the taxpayer's individual tax liability. The mechanics of such a plan would be the litmus test, and I leave that to the "experts".
I agree with the Administration that our excessively-high state income taxes are a disincentive for business relocation, and a heavy burden for Ohio residents. For better or worse, Texas has no state income tax. Lots of businesses choose to locate there. ((Of course, moderate climate (tempered by seasonal tornados!) is also a factor.))
Full disclosure: I'm a Utica Shale landowner and lessor. Realistically, the plan I'm proposing would likely cost me money. I believe such a plan could be very beneficial to the state of Ohio and its residents. "A rising tide rises all ships".
Finally, I think Gov. Kasich has done a poor job marketing his plan. He erroneously assumed he could jamb the plan through the gerrymandered, Republican-dominated legislature. The Ohio Oil & Gas Association has done a much more effective job in opposition to the severance tax, and has the ear of individual legislators via generous campaign contributions.. As someone noted earlier in this string, the E&P's are chasing reliable sources of oil & gas, not ridiculously-low severance taxes.
Fire away!
BluFlame
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Careful...give an inch, take a mile.... egg foo young on the blue suede shoes.... WE /LANDOWNERS & responsible folk would need to be able to look over - accept/cross out (just like on a land lease...) various things acceptable/NOT acceptable.
THAT far as one can tell WOULDN'T happen...so careful. I think it goes without saying that everyone here is of 'make common sense fashion', and THAT is hard to counter when things tend to be 'out of kilter'. Helter Skelter...as one light lights another, nor grows less - so nobleness enkindles nobleness.
WHO gives a Hoot??? *CODE of Conduct & Standards - for *ALL inv...
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