Effective Tax Rates on Oil and Natural Gas

This memorandum provides information concerning severance taxes in Colorado and eight other western states.  The memo provides detailed information on Colorado’s severance tax structure, including estimates for the current value of the ad valorem tax credit and the stripper well exemption.  Estimated effective severance tax rates for nine western states are provided, along with a discussion of why the effective tax rate varies from the statutory tax rate.  Finally, the memo provides estimates of severance taxes paid in each county in Colorado derived from the Legislative Council Staff oil and gas severance tax forecast model.