Gas companies in PA

Gas Production Booms, Drillers' Corporate Tax Payments Plummet
January 17, 2015 – 01:13 pm

Drillers Rethink Operations as Fracking Companies Become Victims of Their Own Success - WSJ

In 2013, oil and gas producers paid just 9% of corporate income taxes collected from the industry while drilling support companies, pipeline, distribution and other related companies paid the other 91%.[6]

Drilling companies in Pennsylvania operate in a favorable tax environment. They can take advantage of federal tax incentives to reduce both state and federal taxable income and can establish subsidiaries that allow their investors to pay Pennsylvania’s low personal income tax rather than the CNIT. When they do pay corporate income taxes, Pennsylvania’s leaky tax system allows for easy shifting of profits out of state. Pennsylvania’s manufacturing sales tax exclusions make much of the equipment and supplies purchased by drillers tax-exempt. Companies do not pay property taxes on the value of oil and gas reserves here, taxes they pay in other states.

With Pennsylvania facing a budget deficit of more than $1.5 billion for 2014-15, new revenue is necessary to avoid new cuts to education, health care, and early childhood budgets. One idea, championed by a bipartisan group of lawmakers, is to enact a severance tax on natural gas. A 5% tax would raise almost $400 million on top of the current impact fee.

Producers Tax Payments Plummet

The Pennsylvania Department of Revenue (DOR) regularly publishes data on taxes paid by the oil and gas production companies, other companies related to oil and gas activity, and their employees.[7] Pennsylvania has had a long history of oil and gas activity, and in 2006, well before unconventional gas production took off in the Marcellus Shale, 869 companies paid a total of $158 million in corporate taxes (CNIT and capital stock and franchise tax (CSFT)), sales taxes, and personal income taxes witheld from their employees.

After a large increase in payments in 2011, corporate income tax revenue from production companies (the companies that pay the impact fee or a production-based severance tax) has plummeted to pre-shale drilling levels. Total tax payments grew to $443 million in 2011, declining to $265 million in 2013, the last full year of data.

Source: pennbpc.org
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Popular Q&A
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What is the phone number for Dominion gas company in PA?

Dominion Gas 103 Westminster Avenue, Greensburg, PA 15601(724) 830-8100(724) 830-0162

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