LETTER: Natural gas industry already taxed


Rep. Mary Jo Daley’s recent opinion column about the governor’s proposed severance tax overlooked an important fact: Pennsylvania already taxes the natural gas industry. We just call it an impact tax.

Pro- and anti-fracking advocates clash in Pennsylvania state capital in Harrisburg. FILE PHOTO

The revenues from this tax are distributed to every single county in the Commonwealth and help to fund critical local projects. In fact, total impact tax revenues are set to reach the $1 billion mark this year. That’s in addition to the other corporate taxes the industry pays.

What is often left out of the severance tax conversation is the fact that Pennsylvania’s overall tax climate is more burdensome than other states with shale drilling. In fact, Pennsylvania’s Corporate Net Income tax is the highest effective rate in the nation. To say that the Commonwealth is letting drillers off the hook because we haven’t placed yet another punitive tax on this industry is comparing apples to oranges. Other states in the shale play don’t have an impact tax, and they also don’t have our same burdensome tax climate.

At a time when market conditions have led to a decline in investment, an additional punitive tax on the natural gas industry will only serve to jeopardize its future in the Commonwealth. Rather than further penalize the industry, our elected officials should be supporting pipeline projects that will help get natural gas to market — which will expand the state’s economic opportunities and enhance our national security through the increased use of domestic energy sources.


Government Affairs Manager

Pennsylvania Chamber of Business and Industry