I was at a debate with my opponent last evening that included a discussion of taxes in general and severance taxes specifically. I listened closely to my opponent, but I’m still not exactly sure what he said about severance taxes. The question was about what bill would be passed in a perfect world, and he went off on some blather about we live in a beautiful state with lots of natural resources, including uranium, coal, oil and gas. But I THINK I heard him say that severance taxes on these minerals would be a good way to get rid of income taxes and pay for schools. He denies he said that, so maybe I had beans in my ears.
But it is an interesting topic to explore. Wyoming balances its budget on severance taxes from coal and oil and gas, and has enjoyed some years with billion dollar surpluses as a result. New Mexico imposes a severance tax and four additional taxes on extractive industries: Oil and Gas Conservation Tax, Oil and Gas Emergency School Tax, and an Oil and Gas Ad Valorem Tax. The New Mexico taxes were all passed back in 1978.
According to a Denver Post article written in 2007, “Colorado's nominal 5.7 percent tax is actually lower than Utah's 4.5 percent. Oklahoma levies 7 percent, New Mexico 9.4 and Wyoming 11.25. Wyoming collected $683.2 million in severance taxes in 2004, almost six times Colorado's tax. Most of the difference comes from Wyoming's higher tax rate.”
So, Oklahoma, New Mexico, and Wyoming all collect higher taxes on extractive industries, yet those industries are still working in those states. Those states even have oil and gas regulations. In fact Wyoming has tougher regulations concerning the disclosure of chemicals in fracking fluids.
Yet in Colorado we have been cutting money for schools. What’s wrong with this picture?
Homework:
Wyoming Severance Tax Rate
New Mexico Severance Tax Rate
Oil and Gas Production taxes in New Mexico
History of Wyomings Oil and Gas Country
2007 Denver Post Article about Colorado Severance Tax Rates
But it is an interesting topic to explore. Wyoming balances its budget on severance taxes from coal and oil and gas, and has enjoyed some years with billion dollar surpluses as a result. New Mexico imposes a severance tax and four additional taxes on extractive industries: Oil and Gas Conservation Tax, Oil and Gas Emergency School Tax, and an Oil and Gas Ad Valorem Tax. The New Mexico taxes were all passed back in 1978.
According to a Denver Post article written in 2007, “Colorado's nominal 5.7 percent tax is actually lower than Utah's 4.5 percent. Oklahoma levies 7 percent, New Mexico 9.4 and Wyoming 11.25. Wyoming collected $683.2 million in severance taxes in 2004, almost six times Colorado's tax. Most of the difference comes from Wyoming's higher tax rate.”
So, Oklahoma, New Mexico, and Wyoming all collect higher taxes on extractive industries, yet those industries are still working in those states. Those states even have oil and gas regulations. In fact Wyoming has tougher regulations concerning the disclosure of chemicals in fracking fluids.
Yet in Colorado we have been cutting money for schools. What’s wrong with this picture?
Homework:
Wyoming Severance Tax Rate
New Mexico Severance Tax Rate
Oil and Gas Production taxes in New Mexico
History of Wyomings Oil and Gas Country
2007 Denver Post Article about Colorado Severance Tax Rates
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