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Thursday, April 16, 2009

After A 7 Year Free Pass, It's Time To Tax Oil & Gas

CCAP Calls For Restoring Tax On Gas/Oil

April 16th, 2009 Potter County Today

dhillCounty Commissioners Association of Pennsylvania is calling on the Pa. General Assembly to improve tax equity in communities impacted by gas and oil development. In an editorial circulated to media across the state, CCAP Executive Director Douglas E. Hill (shown) calls for “a simple and common sense correction to a decision by the state Supreme Court that has resulted in seven years of a free pass for the oil and gas industry when it comes to paying property taxes.”

“Prior to the 2002 court decision, counties assessed property taxes on oil and gas producers,” Hill said. “Exempting oil and gas from property taxation is comparable to exempting owners of two-story colonial homes from paying property taxes, while all other homeowners continue to pay taxes . . . Today, the issue takes on new urgency. New resources are being tapped in the Marcellus formation, (so) broader swaths of Pennsylvania’s residents are now being negatively impacted by the inequity.”

gasfrackinphotoAs the law stands today, all other property owners are carrying the tax responsibility that should be borne by for-profit oil and gas developers, Hill said. “Property owners who are leasing mineral rights would not be negatively impacted,” he explained. “When counties talk about assessing oil and gas, we are talking about property taxes on the producer’s interest, not the landowner’s . . . Because the oil or gas interests are severable, the entity that owns the oil or gas interest in the lease pays the tax, not the surface property owner.”

In other top producing states, some combination of local and state taxes have been levied against oil and gas developers, and this did not cause them to pull up stakes and rush back across the border, Hill said, adding, “Why should local residents and businesses be forced to bear a disproportionate share of the property tax burden while oil and gas developers profit?”

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