severance tax


  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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Word History and Origins

Origin of severance tax1

First recorded in 1925–30

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Example Sentences

Let’s stop playing games here and go back to what we used to have in the ’90s, which was a real severance tax.

While the severance tax was eliminated for all but small landowners in 1999, timber companies continued to pay a harvest tax on the volume of trees they logged.

Gross said he did not forecast any significant financial effect on the companies if lawmakers reinstated a severance tax of 5%, which would be assessed based on the value of trees at the time they’re cut down.

A severance tax would reduce Oregon’s competitiveness with other timber-producing regions and “on the margin lead to less production,” Goodnow said, particularly if the market for lumber weakens.

For decades, private timber owners in Oregon paid a severance tax.

“He tried to do a severance tax on the energy industry,” said Zawistowski.


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[ak-suh-lot-l ]

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severance paysevere