- Energy Tax Facts
- 25 Apr 14
National Journal (IPAA’s Barry Russell): Tax Treatment Ensures Shale Is a Bounty for State Governments
Tax Treatment Ensures Shale Is a Bounty for State Governments
The energy industry is a rare bright spot in our economy – creating new jobs and opportunities for the American workforce while providing millions of dollars in state and federal tax revenue across the nation.
As IHS-CERA recently highlighted, the development of unconventional oil and gas, plus energy-related chemical manufacturing that low-cost natural gas has helped spur, was responsible for more than $74 billion in government tax revenues in 2012. By 2025, IHS estimates this number will reach $138 billion – all while enhancing the American workforce and increasing our gross domestic product (GDP). That’s good news for the federal government, states, and local economies alike.
Just take Pennsylvania, a state experiencing tremendous growth thanks in large part to the work of independent producers in the Marcellus Shale. The State Energy Plan found that by 2020 shale development will generate $5.6 billion in federal, state and local taxes while contributing close to $14 billion in economic activity to the state. In neighboring Ohio, counties with shale development have found sales tax revenues are rapidly increasing.
According to a recent report from Cleveland State University, counties with strong shale development experienced a 20.4% increase in total sales activity in 2012 ($15.5 billion) compared to 2011 ($12.8 billion).