Taxes

California again considering oil severance tax

The California Legislature is again considering a severance tax on oil production, but this time the tax would be 12.5 percent of the gross value of the oil and would apply to natural gas as well.  An earlier severance tax measure, defeated in the Legislature, would have taxed in-state production of oil at a rate of 9.9 percent-per-barrel. 
 
The most recent tax proposal, AB 656 by Assemblyman Alberto Torrico, would earmark revenue from the estimated $1.3 billion tax for higher education. 

WSPA recognizes California has major budget problems.  But it also has a major economic program and massive unemployment.  Experts who have analyzed the severance tax proposals have concluded it will result in a decline in production of crude oil in California, an increase in exports, the loss of more than 9,000 jobs and higher energy costs for businesses and consumers.

Higher taxes for energy  will make it more difficult for California to work its way out of the most severe recession this state has experienced since the Great Depression. 

WSPA is working with a broad coalition of energy producers, energy industry service providers, employees and local governments to oppose AB 656.  Click here for a fact sheet on AB 656.

For more information on taxes, please visit:

American Petroleum Institute

Energy Tomorrow

Californian's Against Higher Taxes