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Thursday, May 17, 2012

Despite Industry's Complaints, New Tax Proposal in Ohio Not as Costly as Others

From the Columbus Dispatch:
The study released yesterday, requested by the Ohio Business Roundtable, shows that the state’s current overall effective tax rate (measured as total taxes divided by sales) is 80 percent below the average for the other top seven states for a well producing dry natural gas and natural gas liquids. For a well producing dry natural gas and oil, Ohio’s effective tax rate is 65 percent below the average, the study said.
Even with the increase pushed by the governor, Ohio’s effective severance tax rate would still be 16 percent lower than the other states’ average for the well producing dry natural gas and natural gas liquids. It would be 40 percent lower for the well producing dry natural gas and oil.
Including all major state and local taxes for both types of wells, Ohio’s overall effective tax rate would be 40 percent or 48 percent lower than the other states’.
My guess: higher rates haven't driven developers from other shale exploration states, and the relatively low increased taxes proposed wouldn't drive them from Ohio either.

Read the rest of the original article here.

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