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.

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Etymology

Origin of severance tax

First recorded in 1925–30

Example Sentences

See Examples For:

severance tax

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

An oil embargo by Arab countries triggered a boom in the coal industry, and Carroll’s administration was awash in money from the coal severance tax.

From Washington Times ● Dec. 10, 2023

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

Legislation adopted this year will divert excess income from petroleum to the state’s severance tax permanent fund, to generate investment income and underwrite construction projects.

From Seattle Times ● Aug. 23, 2023

In contrast, retaining current rates and allowing Piceance production to grow by an additional 1 billion cubic feet per day would generate around $117 million per year in severance tax for Colorado.

From Washington Times ● Feb. 15, 2017