Outline for development of cost-based state severance taxes

Journal Article · Wed Oct 01 04:00:00 EDT 1980 · Nat. Resour. J.; (United States)

OSTI ID:6592124

Peters, L

States with abundant resources are being tempted to use severance taxes to acquire part of the windfall created from production of resources. This temptation should be resisted in favor of carefully constructed cost-based severance taxes. Taxation of natural resources should raise funds sufficient to cover the present and future, and direct and indirect, costs created by extraction and production of natural resources. A state should analyze its expenses to determine the bases for setting a severance-tax level. An essential element of recompensed costs is an amount for asset replacement to repay the state for its permanent loss resulting from resource extraction. It is necessary in order for the state to adequately provide future economic opportunities and viability for its citizens. In determining severance tax levels, states should not forget the revenues created by other direct and indirect taxes on the extractive industry. Resource states should also consider adverse consequences of a severance tax on the extractive industry. Resource states must bolster their severance taxes against legal attack by basing the taxes on data supported by research and analysis. 105 references.

• OSTI ID: 6592124
• Journal Information: Nat. Resour. J.; (United States), Journal Name: Nat. Resour. J.; (United States) Vol. 20:4; ISSN NRJOA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
290400 -- Energy Planning & Policy-- Energy Resources
293000* -- Energy Planning & Policy-- Policy
Legislation
& Regulation
530100 -- Environmental-Social Aspects of Energy Technologies-- Social & Economic Studies-- (-1989)
ECONOMIC IMPACT
ENERGY SOURCE DEVELOPMENT
EVALUATION
LEGAL ASPECTS
RESOURCE DEVELOPMENT
SEVERANCE TAX
STATE GOVERNMENT
TAXES