Forthcoming CLOSUP oil, gas tax study highlighted in U.S. News & World Report

September 15, 2014

“States are charging less and less to allow oil and gas companies to drill more and more,” writes Alan Neuhauser in the September 9, U.S. News & World Report article, “As oil and gas boom, energy taxes fall.” The piece refers to a forthcoming report by CLOSUP Director Barry Rabe and policy analyst Rachel Hampton, which explores the taxes U.S. states levy on oil and gas.

While state taxes on new oil and gas wells have stagnated, Rabe and Hampton find, oil and gas severance taxes are receiving increased attention.

“For cash-hungry legislatures, severance taxes offer distinct advantages,” writes Neuhauser. “Even if the charge is steep, drillers can pass it on to other companies out of state – such as refiners or distributors – long before it’s felt by consumers (read: voters). Plus, unlike a new factory, which can be built in whichever state offers the best tax rate, wells must ultimately be dug near oil and gas deposits – therefore rendering severance taxes ultimately inescapable.”