Ohio’s current tax is 20 cents per barrel of oil and 3 cents per million cubic feet of natural gas. Over thirty states in total have some kind of severance tax, and Ohio currently comes out on the lower end but it is not unusually low. Pennsylvania, for example, has no severance tax (though the state’s governor wants to impose one). West Virginia, on the other hand, has a five percent severance tax on oil and gas. Gov. Kasich wants to put Ohio’s tax at 6.5 percent for most oil and gas, with a lower rate of 4.5% on natural gas liquids (e.g., ethane and butane).
Gov. Kasich hopes the new tax regime would bring in about $310 million per year when it is fully in place. This money would all go into the state’s general fund and would help with other priorities. Most notably, he hopes to slightly increase school funding and drastically cut income taxes for individuals. He has proposed the increased severance tax before only to have state legislators reject it. At this time it appears unlikely that the tax increase will pass.
Cimmaron Land supports the needs of Ohio operators. Give us a call today to let us know what we can do for you: (412) 212-7517.