Just The Facts: Marcellus Shale Has Generated “More Than $1 Billion in State Taxes Since 2006”

Canonsburg, Pa. – The myth that those developing Marcellus Shale natural gas resources are not paying taxes just became even more difficult to peddle by those opposed to responsible, job-creating energy production in the Commonwealth. In fact, according to the Pennsylvania Department of Revenue, the Marcellus Shale has been, and continues to be, a major tax windfall for Pennsylvania – one that is becoming even more lucrative every year. Following are a few highlights of the department’s latest report:

  • Pa. Dept. of Revenue: “Drilling Industry Paid More Than $1 Billion in State Taxes Since 2006, Tax Payments in First Quarter of 2011 Already Surpass 2010 Totals”: At the direction of Governor Tom Corbett, the Department of Revenue today released an analysis showing that companies engaged in and related to natural gas drilling activities in Pennsylvania have paid more than $1.1 billion in state taxes since 2006. Those taxes came on top of the billions of dollars of infrastructure investments, royalty payments and permit fees paid by the industry. The Revenue Department’s analysis, which breaks out tax payments from oil and gas companies and their affiliates through April 2011, indicates that 857 of these companies have already paid $238.4 million in capital stock/foreign franchise tax, corporate net income tax, sales/use tax and employer withholding to the state in 2011. These figures from the first quarter of this year already exceed by nearly $20 million the total tax payments made in all of 2010. (Dept. of Revenue Release, 5/211)
  • “Pa. Revenue Department offers view of Marcellus Shale tax payments”: It has become the billion-dollar question in the Capitol: How much, exactly, do the big natural-gas drilling companies pay in taxes? The state Department of Revenue on Monday weighed in with its official version: $1.1 billion since 2006. That figure includes an array of taxes, from corporate taxes and sales tax the companies paid on goods to the taxes they withheld from employees. … Revenue Secretary Dan Meuser [said] “it provides the full level of data that can be offered. … And it tells us that the Marcellus gas industry is paying taxes, they are paying their fair share.” (Philadelphia Inquirer, 5/3/11)
  • “Natural gas drilling helping state’s economy”: The [Revenue] department’s analysis also identified $214.2 million in personal income taxes paid since 2006 attributable to Marcellus Shale lease payments to individuals, royalty income and sales of assets. (CBS 21, 5/2/11)
  • “Pennsylvania revenue official says drillers pay big taxes”: That [Department of Revenue] data, dating to 2006, credits the drilling industry with sending more than $219 million to state coffers last year. The total includes two key business taxes — the corporate net income tax and the capital stock and franchise tax — as well as sales and employee withholdings that companies submit. An early look at this year’s taxes already shows more than $238 million in payments from companies extracting natural gas and their direct suppliers, said Acting Revenue Secretary Daniel Meuser. In an interview, he said the data showed that gas drillers “pay the same level of taxes as any business in the state.” … Kathryn Klaber, president of the Marcellus Shale Coalition. She said that while it didn’t include millions of dollars spent in permit fees and road repairs, the analysis “sets the record straight” on tax payments. (Post-Gazette, 5/3/11)
  • “Revenue Department: $1.1B in taxes from natural gas firms since ’06”: The state Department of Revenue has waded into the controversy over how much the Marcellus Shale industry contributes to state tax revenue. “[C]ompanies engaged in and related to natural gas drilling activities in Pennsylvania have paid more than $1.1 billion in state taxes since 2006,” the department said in a statement Monday afternoon. “Those taxes came on top of the billions of dollars of infrastructure investments, royalty payments and permit fees paid by the industry,” the department said. (Central Penn Business Journal, 5/3/11)

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