severance tax


: a tax levied by a state on the extractor of oil, gas, or minerals intended for consumption in other states compare royalty sense 5a

Examples of severance tax in a Sentence

Recent Examples on the Web Legislation adopted this year will divert excess income from petroleum to the state’s severance tax permanent fund, to generate investment income and underwrite construction projects. Morgan Lee, Fortune, 24 Aug. 2023 Pennsylvania notably does not have a severance tax [severance tax: a state tax imposed on the extraction of non-renewable natural resources that are intended for consumption in other states—Ed.]. IEEE Spectrum, 12 May 2021 Over the past decade, the coal severance tax revenue collected by Martin County based on how much coal is pulled out of the ground has fallen more than 90 percent to $80,000 in the last fiscal year, according to Colby Kirk, the county’s deputy executive judge. New York Times, 2 Jan. 2022 Why doesn’t California levy a severance tax? Los Angeles Times, 7 Oct. 2021 So that would mean taxes like, uh, the commercial activity tax cigarettes and tobacco insurance policy taxes, the fracking severance tax. Laura Johnston, cleveland, 1 Dec. 2022 The growth in state severance tax collections is not surprising, given that the tax is assessed on the sales value of the production, not as a percentage of volume as is the case in some other states. David Blackmon, Forbes, 10 Jan. 2023 For September through June, oil and gas severance tax collections increased over the same period in fiscal 2021 by 89.7% and 192.6%, respectively. Dallas News, 1 July 2022 One potential revenue solution for counties, proposed in a 2021 bill, is to reinstitute the state severance tax on harvest values that was collected for decades before the timber industry convinced the Legislature to abandon it three decades ago. oregonlive, 8 Oct. 2022 See More

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'severance tax.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

First Known Use

1928, in the meaning defined above

Time Traveler
The first known use of severance tax was in 1928

Dictionary Entries Near severance tax

Cite this Entry

“Severance tax.” Dictionary, Merriam-Webster, Accessed 4 Oct. 2023.

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