severance tax

American  

noun

1. a tax levied by a state on the extraction and use of a natural product, as coal, that is sold outside the state or during a certain period.

---

Etymology

Origin of severance tax

First recorded in 1925–30

Example Sentences

Alaska draws revenue from oil-and-gas production both from royalties and through a progressive severance tax, which means the tax grows as the price of crude climbs.

From The Wall Street Journal • Mar. 14, 2026

In another report, Carbon Tracker recommended a severance tax on remaining oil output to prop up an insurance program to plug wells.

From Salon • Oct. 20, 2023

“I was the sponsor of the coal severance tax in West Virginia. Millions and millions of dollars have been paid on that tax, and I’m sure the coal industry has never forgotten.”

From Seattle Times • Jun. 15, 2023

Coal severance tax revenues declined 46.7 percent and cigarette tax collections fell 9.4 percent in July.

From Washington Times • Aug. 10, 2016

A severance tax increase has been a priority of Republican Gov. John Kasich for years.

From Washington Times • Feb. 11, 2016