A new study by Ernst & Young shows that Ohio would have the lowest tax rates of any major shale state, even if Gov. John kasich gets his so-called fracking tax, the Columbus Dispatch reported.
The study was released Tuesday and had been requested by the Ohio Business Roundtable.
It shows that Ohioi's current overall effective tax rates (measured as total taxes divided by sales) is 80 percent below the average for the other top seven states for a well producing dry natural gas and natural gas liquids.
For a well producing dry natural gas and oil, Ohio's effective tax rates is 65 percent below the average, the study says.
Kasich wants to use some of the revenue from the proposed tax to fund a state income-tax cut. But Republicans in the legislature have delayed that plan. They fear the higher taxes would hurt natural gas and oil producers.
Even with the increase pushed by Kasich, Ohio's effective severance tax rates would still be 16 percent lower than the other states' average for a well producing dry natural gas and natural gas liquids, the study said.
It would be 40 percent lower for a well producing dry natural gas and oil.
Including all major state and local taxes for both types of wells, Ohio's overall effective tax rates would be 40 percent or 48 percent lower than other states.
"Ernst & Young's analysis confirms our belief that Gov. Kasich's severance tax proposals constitute strong and responsible tax policy that will keep our state growing while building on the comprehensove business tax reforms enacted by the General Assembly in 2005 and capitalizing on this burgeoning sector of our economy," said Richard Stoff, president and CEO of the roundtable.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.