A majority of accountants in Pennsylvania agree that imposing a gas extraction tax is one of the best ways to solve the state’s fiscal deficit, according to the third annual Certified Public Accountant Poll.
The poll, conducted by the Pennsylvania Institute of Certified Public Accountants, reports that 67 percent of the accountants surveyed agree that enacting Gov.-elect Tom Wolf’s proposed extraction tax (also known as a severance tax) on Marcellus Shale operators would be a boon to the state’s coffers. The tax was one of the top three strategies for economic expansion along with reforming government pensions and reducing the corporate net income tax.
A severance tax is usually imposed when non-renewable resources, such as oil and natural gas, are extracted (or severed) within a taxing jurisdiction. The tax is most commonly used in areas where the majority of extraction occurs on privately owned land, or where rights to minerals below the surface are also privately owned.
Wolf has previously stated that if he were elected, he would drive an effort for a five percent tax on oil and natural gas production which would be used to fund schools, road and bridge repairs, and economic development. An annual ‘impact fee’ is already imposed on gas and oil well owners for each new unconventional well developed.