Colorado severance taxes too low?

Filed under: Daily News | Tags:

Colorado’s severance taxes, coupled with a “dizzying array of exemptions and deductions,” have cost the state nearly $1.3 billion in foregone tax revenue, says a report from Community Office for Resource Efficiency.

Severance taxes are levied on the industry to recoup part of the value of resources such as natural gas, oil and coal forever “severed” from the ground.

If Colorado, which levies a severance tax with rate effective after exemptions and deductions of 1.9 percent, had taxed oil, gas and mineral extraction at the same rate as Wyoming (5.5 percent), the state’s coffers would have swelled by more than $1.3 billion between 2002-2006, the report claims.