Pennsylvania’s unique natural gas severance tax, known as the Impact Fee, continues to deliver on its original promise: returning revenue directly to local communities.
New figures released by the Pennsylvania Public Utility Commission show the impact fee generated $243.9 million for the 2025 reporting year — a 48% increase over the previous year — bringing the total distributed to more than $3.12 billion for community priorities in all 67 Pennsylvania counties.
“From significant tax revenue and family sustaining jobs, to lower energy costs for consumers, Pennsylvania’s natural gas industry continues to provide measurable benefits to our Commonwealth,” said Jim Welty, president of the Marcellus Shale Coalition. “Pennsylvania’s approach to distributing this tax is transparent and delivers revenue back into communities in all 67 counties. Everyone should appreciate the significant and lasting benefits the Impact Fee has provided to Pennsylvania.”
Unlike many state tax programs, Pennsylvania’s impact fee sends funding directly back to counties and municipalities while also supporting statewide environmental initiatives through the Marcellus Legacy Fund. Pennsylvania is also the only state in the nation which annually increases its tax rate on shale gas by a rate of inflation; this year’s tax rate increased by 3.8% over 2025.
In addition, it is estimated that over $460 million in Personal Income Tax revenue was generated by the industry in 2025, on top of hundreds of millions of dollars in other business and corporate taxes. Several of Pennsylvania’s competitor states for energy production, such as Texas, do not levy a personal and corporate income tax. Pennsylvania’s personal income tax rate is 3.07 percent and the corporate net income tax rate is currently levied at 7.49 percent.
Communities have used impact fee revenue to repair roads and bridges, modernize water and sewer systems, strengthen emergency response capabilities, reduce flood risks, preserve open space, improve parks and playgrounds, and advance economic development initiatives. The funding reaches every corner of the Commonwealth, including counties without natural gas production.
“Pennsylvania’s natural gas industry continues to play an important role in supporting our economy, strengthening our energy future, and providing tangible benefits to communities across the Commonwealth,” said PA PUC Chairman Steve DeFrank. “The impact fee ensures that local governments and statewide programs share directly in those benefits, delivering funding for infrastructure, environmental improvements, public safety, and other priorities that improve quality of life for Pennsylvanians.”
As policymakers continue to debate Pennsylvania’s energy future, the impact fee remains a tangible example of how responsible natural gas development translates into lasting investments for communities—supporting projects that residents see and use every day while strengthening local budgets across the Commonwealth.
Here’s what Pennsylvanians are saying about these annual returns:
Senator Gene Yaw: Over Half a Billion Dollars Generated for 23rd District Through Natural Gas Impact Fee Since 2011
“The Impact Fee not only funds critical projects locally but also a wide variety of important environmental projects in communities throughout the state…The natural gas industry has been a great partner in creating new jobs and opportunities, and today’s announcement is another reminder of the importance of this industry in Pennsylvania.”
David Sanko, Pennsylvania State Association of Township Supervisors executive director
“Lawmakers should consider using this successful model for other statewide priorities. When resources go straight to local governments, projects move faster, taxpayer dollars stretch further, and communities see real improvements in infrastructure, public safety, and quality of life.”
WTAJ: PA Natural Gas impact fee generates nearly $224M, ‘Lasting benefits’
Natural gas development is a “key” economic driver in Pennsylvania, supporting over 120,000 family-sustaining jobs, with average wages approaching $100,000, which is more than double the state median.
Additionally, households and businesses that use natural gas saved over $8.8 billion last year when compared to 2008 utility prices.
Observer-Reporter: Region receives millions in natural gas impact fees
State Sen. Camera Bartolotta, whose district includes all of Washington and Greene counties, said, “The natural gas industry continues to deliver substantial benefits to our region. … These funds allow communities to invest in critical local services, conservation programs and infrastructure projects that improve residents’ quality of life, all without placing additional costs on local taxpayers.”
Rep. Tina Pickett: Pickett, Baker: Wyoming County to Receive More Than $3.6 Million in Natural Gas Impact Fees
“I am pleased to see Wyoming County is again benefitting greatly from the impact fees derived from nearby natural gas producers. It’s just another example of how the industry continues to support Northeast Pennsylvania,” said Pickett. “This extra revenue is crucial for our local governments to fund critical programs and improvement projects.”
Rep. Tim Bonner: Wentling, Bonner Announce Act 13 Funding Disbursements to Mercer County
“Our energy production adds greatly to the economy, our national defense and our energy independence. It also adds significant revenue to our state treasury and local governments. We are fortunate to have abundant clean energy in our Commonwealth which also supports government services.”
Rep. Martin Causer: Causer Announces Nearly $3 Million in Natural Gas Impact Fees for 67th District
“The majority of impact fee revenue collected by the Commonwealth comes back to our counties and communities where drilling takes place so we can address the impacts those activities have on our infrastructure, housing and public safety services,” Causer said. “Revenues are up this year as a result of increased natural gas drilling activity, which is also great news for energy consumers across the region.
Explore Clarion: Rep. Josh Bashline Announces Over $2.33 Million In Natural Gas Impact Fees For 63rd District
“Tapping into the resources beneath our feet strengthens our energy independence and reduces our reliance on foreign energy sources,” Bashline said. “From the creation of family-sustaining jobs to providing opportunities in our region, the natural gas industry is an extraordinary pillar to help us thrive.”
Wyoming County Examiner: Wyoming County, municipalities receive $3.6 million in gas drilling impact fees
“Energy development provides a significant economic boost for the region, and these funds help our local governments pay for a wide range of community and environmental protection projects,” Baker said.
Pennsylvania Business Report: Natural gas impact fee windfall tops $243M in Pennsylvania
Several of Pennsylvania’s competitor states for energy production, such as Texas, do not levy a personal and corporate income tax, notes the Marcellus Shale Coalition. Pennsylvania is also the only state in the nation which annually increases its tax rate on shale gas by a rate of inflation; this year’s tax rate increased by 3.8% over 2025.
TribLive: New wells, higher gas prices raise state’s impact fee distribution to $244 million
With the additional revenue from Act 13 impact fees for 2025, the PUC said more than $3.12 billion has been distributed from that revenue stream since 2012. Pennsylvania is also the only state that annually raises its tax rate on shale gas by a rate of inflation, which was 3.8% over the distribution in 2025, the Marcellus Shale Coalition said.
Rep. Clint Owlett: Owlett Announces $9.45 Million in Natural Gas Impact Fees for Tioga County
“The impact fee continues to play a vital role in supporting our communities, helping to address the impacts of drilling activity while also enabling us to reap the benefits of the jobs created,” Owlett said. “With energy demand on the rise across the Commonwealth and the nation, our natural gas industry is more important than ever.”
Rep. Robert Leadbeter: More Than $67,000 in Impact Fees Distributed to Columbia County, Says Leadbeter
“Policies that place unnecessary burdens on Pennsylvania’s energy producers threaten our ability to maintain affordable, reliable energy and weaken our position as a national leader,” said Leadbeter. “We have ample natural gas resources, and we must continue to use them. This critical component must be developed to create jobs, grow the economy, enhance energy security, and give hardworking families dependable energy for the future.”
Rep. Joe Hamm: Hamm Reports More Than $11.7 Million in Natural Gas Impact Fees to Benefit 84th District Residents
“The law creating it is designed to ensure municipalities impacted by drilling have the flexibility to spend the funding on their most vital needs, returning significant benefits for their residents.”
Sharon Herald: Mercer County municipalities receive money from gas well fees
“I’m pleased this money is coming back to Mercer County and its municipalities for a host of uses, including the creation of trails, like Greenville’s Shenango River Trail and Sharpsville’s Trout Island Trail,” state Rep. Parke Wentling (R-Hempfield Township) said in announcing the disbursements.
Beaver County Radio: Representative Roman Kozak: Nearly $1.46 Million in Natural Gas Impact Fees Awarded to 14th District
State Representative Roman Kozak (R-Beaver) announced today in Chippewa Township that Beaver County will receive more than $824,000 in impact fees from the natural gas industry. The municipalities in the 14th Legislative District will also receive an additional $634,000.
