Gordner: No new taxes on drillers
LEWISBURG – The vast majority of Pennsylvanians think natural gas industries should pay a severance tax when they drill here. However, according to State Senator John Gordner (R-27, Berwick), gas companies already pay taxes.
“The natural gas industry pays every tax that every other company or corporation pays,” says Gordner. “Whether it is corporate net income tax, a subchapter S, every employee tax, the capital stock and franchise tax, they pay every tax that every other business and corporation pays.”
Pennsylvania is the only state that does not impose a severance or extraction tax, but Gordner says Pennsylvania is also the only state in the country that has a corporate net income tax AND a capital stock and franchise tax. Together, they make up over 11%, and adding a severance tax could lead to companies relocating.
“One of the candidates for governor has proposed a 10% severance tax,” says Gordner. “So, think about that. That is 9.99% for the corporate net income tax and 1.25% for the capital stock and franchise tax. Add 10% and that is 21.25%. Compare that to Ohio, which has a tax combination of about 8%, and Texas, which is 5%. If you are a natural gas company and you can pull up your rig and go wherever you want to go, what are you going to do?”
The biggest job growth area in the past five years has been the natural gas industry, and Gordner says a severance tax may drive that business away. Gordner adds that Pennsylvania also has an additional tax called the local impact fee. He says this year the natural gas industry is paying an additional $225 million from the fee, and that money goes to every county in the state. (Sara Bartlett)
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