Impact Fee vs. Severance Tax

Natural gas producers for unconventional wells do pay something; it’s in the form of an impact fee.  Impact fees arose from PA Act 13 of 2012.  In 2016, $173.2 million was paid in impact fees, and in 2015, the amount was $158.7 million.    Total impact fees have been over 1.2 billion since the Act went into effect.  Regardless of whether it is called an impact fee or severance tax, payments are made.  However, the real question is: What happens to the money?

The money collected is distributed among the municipalities, counties and environmental and infrastructure programs throughout the Commonwealth.  The majority of the money collected goes to county and municipal governments in which shale-gas activity is occurring, rather than going to the general funds and use of the Commonwealth.

This is the disconnect.  Political officials want to use these funds for general purposes, so that there is more distribution of the funds to a greater audience – as opposed to the funds going to where the shale-gas activity occurs.  Those areas without shale-gas activity aren’t receiving a lot of benefits from the shale-gas assets of the Commonwealth. To learn more about impact fees, contact us. 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2021 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
CARES Act, Tax BY Austin Nace
Disappointing News for Employers: Employee Retention Credit Ends Before Fourth Quarter of 2021
Build Back Better Tax Legislation Update – International Tax Changes
Welcome News for the Trucking Industry - Clarification of 100% Meals and Entertainment Deduction for Per Diems
Higher Estate Tax Exemption Amount for 2022
Postcard from the AICPA & CIMA | PDI Oil & Gas Conference
Michael Jackson vs. Kenny Pickett
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.