State Mineral Taxes, 1982

Excerpts from the report: This report updates two earlier reports published in 1977 and 1978. When those reports were written, the major concern was whether sufficient revenues would be available to meet the needs of State and local governments during periods of rapid growth. Reflecting that concern, the reports stressed the form of mineral taxes and discussed the advantages and disadvantages of the alternative types of taxes. Policy concerns have changed since then. The issue is no longer whether sufficient revenues are available, but rather whether rates in some States are excessive. Reflecting this change in the policy debate, sections discussing the amount of revenue collected in major mineral-producing States, the factors which must be considered when setting a rate, and the recent U.S. Supreme Court cases involving State severance taxes were added, while the analysis of alternative types of taxes was shortened. This report provides background for the current policy debate. Its initial sections provide general information about severance taxes including the rationale for a special minerals tax, the forms which the tax may take, and the importance of the tax as a revenue producer. Sections examining considerations in setting severance tax rates and discussing the implications of recent U.S. Supreme Court decisions follow. The report concludes with detailed summaries of existing severance tax laws in each major mineral-producing State.