severance tax

noun

|Updated on: 10 Aug 2018

Definition of severance tax

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

Recent Examples of severance tax from the Web

The Pennsylvania legislature created the fee as an alternative to a severance tax assessed on production volume, which is commonly used in other oil and gas producing states.

— andrew maykuth, Philly.com, "Pa. discloses how it will divvy up $210M in shale gas fees," 21 June 2018
In early 2005, Blankenship opposed legislation proposed by Manchin that would have increased the coal severance tax and funded workers’ compensation benefit plans.

— steven mufson, Washington Post, "Spurned by Trump and GOP, coal baron Don Blankenship seeks a second chance in West Virginia," 22 May 2018
Oil-producing states, which rely on severance taxes, were hurt by the sharp fall in oil prices in 2015 and 2016.

— david harrison, WSJ, "Many States Are Likely Unprepared for Next Downturn," 8 July 2018
Buchanan County, which borders both Kentucky and West Virginia, is seeing $150,000 to $200,000 more in coal severance tax dollars every month compared to the monthly totals a year ago, said Craig Horn, the county administrator.

— michael collins, USA TODAY, "President Trump has yet to save the struggling coal industry, numbers show," 4 Apr. 2018
The revenue Texas gets from severance taxes, land rents and royalty fees on oil and gas production could come in 27 percent higher than previously expected in fiscal 2018 if crude prices stay elevated above $60 a barrel, Fitch Ratings said Thursday.

— collin eaton, Houston Chronicle, "Texas' natural resources revenue to rise in 2018 with higher oil prices," 25 Jan. 2018
Currently, the royalty legislation is attached to a House proposal to enact a severance tax on natural gas, which has also been stalled for years.

— andrew maykuth, Philly.com, "Shale gas was going to make them rich. Then the checks arrived.," 21 Dec. 2017
The state’s education budget, 65 percent of which comes from federal mineral royalties and severance taxes, has been especially hard hit.

— adam federman, Slate Magazine, "The War on Coal States," 15 June 2017
The amount of oil and gas severance tax the state expects to collect this year was downgraded by nearly 11 percent; next year’s collections were revised down 20 percent.

— jonathan shorman and hunter woodall, kansascity, "Kansas revenue expected to rise, but school funding demands loom," 2 Nov. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'severance tax.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.