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

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

In 1974, he seized on an oil boom to fill Louisiana’s coffers, changing the severance tax from 25 cents a barrel to 12.5% of value.

From Seattle Times • Jul. 12, 2021

Finally, Wolf wants a severance tax on the natural gas industry to fund workforce development programs.

From Washington Times • Feb. 10, 2021

The improvements were largely driven by better-than-expected sales tax collections, and also by slight upticks to corporate and severance tax expectations.

From Washington Times • Dec. 24, 2017