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A Quantitative Description of State-Level Taxation of Oil and Gas Production in the Continental U.S

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  • Weber, Jeremy G.
  • Wang, Yongsheng
  • Chomas, Maxwell

Abstract

We provide a quantitative description of state-level taxation of oil and gas production in the Continental U.S. for 2004 to 2013. Aggregate revenues from production taxes nearly doubled in real terms over the period, reaching $10.3 billion and accounting for 20 percent of tax receipts in the top ten revenue states. The average state had a tax rate of 3.6 percent; nationally, the average dollar of production was taxed at 4.2 percent. The oil-specific rate estimated for the study period is $2.4 per barrel or $5.5 per ton of carbon. Lastly, state-level tax rates are two-thirds higher in states excluding oil and gas wells from local property taxes, suggesting that the policies are substitutes for one another.

Suggested Citation

  • Weber, Jeremy G. & Wang, Yongsheng & Chomas, Maxwell, 2016. "A Quantitative Description of State-Level Taxation of Oil and Gas Production in the Continental U.S," MPRA Paper 71733, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:71733
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    8. Marchand, Joseph & Weber, Jeremy, 2015. "The Labor Market and School Finance Effects of the Texas Shale Boom on Teacher Quality and Student Achievement," Working Papers 2015-15, University of Alberta, Department of Economics.
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    Cited by:

    1. Katie Jo Black & Shawn J. McCoy & Jeremy G. Weber, 2018. "When Externalities Are Taxed: The Effects and Incidence of Pennsylvania’s Impact Fee on Shale Gas Wells," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(1), pages 107-153.
    2. Zuo, Na & Zhong, Hua, 2020. "Can resource policy reverse the resource curse? Evidence from China," Resources Policy, Elsevier, vol. 68(C).
    3. Brian E. Whitacre & Dylan L. Johnston & David W. Shideler & Notie H. Lansford, 2020. "The influence of oil and natural gas employment on local retail spending: evidence from Oklahoma panel data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 133-157, February.
    4. Reimer, Matthew N. & Guettabi, Mouhcine & Tanaka, Audrey-Loraine, 2017. "Short-run impacts of a severance tax change: Evidence from Alaska," Energy Policy, Elsevier, vol. 107(C), pages 448-458.
    5. Kumar, Sourabh & Kumar Barua, Mukesh, 2022. "Modeling and investigating the interaction among risk factors of the sustainable petroleum supply chain," Resources Policy, Elsevier, vol. 79(C).
    6. Brown, Jason P. & Maniloff, Peter & Manning, Dale T., 2020. "Spatially variable taxation and resource extraction: The impact of state oil taxes on drilling in the US," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    7. Ericson, Sean J. & Kaffine, Daniel T. & Maniloff, Peter, 2020. "Costs of increasing oil and gas setbacks are initially modest but rise sharply," Energy Policy, Elsevier, vol. 146(C).
    8. Adele C. Morris & Noah Kaufman & Siddhi Doshi, 2020. "Revenue at Risk in Coal-Reliant Counties," NBER Chapters, in: Environmental and Energy Policy and the Economy, volume 2, pages 83-116, National Bureau of Economic Research, Inc.
    9. Newell, Richard G. & Raimi, Daniel, 2018. "The fiscal impacts of increased U.S. oil and gas development on local governments," Energy Policy, Elsevier, vol. 117(C), pages 14-24.
    10. Trachtman, Samuel, 2020. "What drives climate policy adoption in the U.S. states?," Energy Policy, Elsevier, vol. 138(C).
    11. Adele Morris & Noah Kaufman & Siddhi Doshi, 2020. "Revenue at Risk in Coal-Reliant Counties," NBER Working Papers 27307, National Bureau of Economic Research, Inc.
    12. Thomas, Pinky & Collins, Alan & Etienne, Xiaoli & Mugabe, Douglas, 2024. "Impacts of state tax and resource ownership policies on extraction: Evidence from U.S. natural gas production," Energy Economics, Elsevier, vol. 138(C).

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    More about this item

    Keywords

    state policy; oil and gas taxation; effective tax rates;
    All these keywords.

    JEL classification:

    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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