The Independent Oil & Gas Association of New York is voicing opposition to a proposal by the Paterson Administration to impose a “severance tax” on oil and natural gas production in New York State.
Governor Paterson is proposing a 3-percent severance tax on the market value of natural gas harvested – or severed – from a gas pool in the Marcellus or Utica Shale formations. The tax would apply to horizontal wells, which have the potential to produce greater volumes of natural gas. There is already a production tax on the existing 14,000 wells in New York that are producing natural gas – through a real property tax assessment – which primarily stays in local communities, so an additional tax is unnecessary.
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