>>Back to Local Control of AssetsSeverance Tax Policy Scan

Central Appalachia (Eastern Kentucky, Western Maryland, Southeastern Ohio, Eastern Tennessee, Southwestern Virginia and West Virginia) is rich in beauty, culture and natural resources. These natural resources – particularly coal, natural gas and timber – have been the backbone of the region's economy and have helped fuel America's economy for generations.

While these natural resources have created significant economic growth in the region, much of the wealth generated has not been shared with the people who live here. Also, the extraction of these resources has also come with considerable costs to the communities, the environment and the region's residents. One way that the region has attempted to recoup some of these costs is by levying severance taxes. Severance taxes are taxes imposed distinctively on removal of natural resources (e.g., oil, gas, coal, other minerals, timber, fish, etc.) from land or water and measured by the value or quantity of products removed or sold.

Severance taxes are collected throughout the Central Appalachian region but each state, and sometimes counties within the state, have different policies for their collection, administration and revenue distribution.

In 2012, CARN released the first state-by-state scan of severance tax policy in Central Appalachia, including what resources are taxed and how the funds are being used. This report provides an overview of these policies including the types of resources that are taxed, the rates of the taxes, how the revenues are distributed and the intended uses of the funds.

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