Pa. Revenue Department offers view of Marcellus Shale tax payments

 HARRISBURG - It has become the billion-dollar question in the Capitol: How much, exactly, do the big natural-gas drilling companies pay in taxes?

The state Department of Revenue on Monday weighed in with its official version: $1.1 billion since 2006. That figure includes an array of taxes, from corporate taxes and sales tax the companies paid on goods to the taxes they withheld from employees.

It also encompasses not only the drillers, but companies that have cropped up because of drilling in the Marcellus Shale - such as those that sell sand used in the high-pressure drilling process of hydraulic fracturing, or fracking.

"I think what we have here is the long-form birth certificate of the Marcellus Shale industry," said Revenue Secretary Dan Meuser. "It provides the full level of data that can be offered. . . . And it tells us that the Marcellus gas industry is paying taxes, they are paying their fair share."

The new study comes on the heels of a report last week by the liberal-leaning Pennsylvania Budget and Policy Center, which said big energy companies, including drillers, paid just shy of $40 million in state business taxes in 2008, far less than the industry had said.

It also comes as Harrisburg tries to bridge the deep divide over whether to impose a tax, or even a fee, on the extraction of natural gas from the Marcellus Shale. Pennsylvania is the largest gas-producing state without such a severance tax.

Gov. Corbett has said he does not support a tax, but is open to considering a "local impact fee" provided the money raised goes directly to drilling communities. The state Senate president pro tempore, Joe Scarnati (R., Jefferson), last week unveiled his proposal for such a fee: a minimum of $10,000 per well and an increase depending on production and the price of gas.

On Monday, critics pounced on the study by Corbett's Revenue Department, saying that items such as the employer withholding tax can hardly be seen as a true reflection of an industry's tax contributions.

"I'm not sure why the Department of Revenue is becoming an apologist for the drilling industry," said State Rep. Greg Vitali (D., Delaware), who is pushing a severance tax bill. "It sounds like the administration is trying to justify its ill-considered decision of not imposing a severance tax."

Asked to break down their figures by pure business taxes, the Revenue Department said that in 2010, drilling companies paid $98 million in corporate net income tax. This year, so far, that number has jumped to $199 million.

Still, of 900 drilling companies, only 178 paid corporate net income taxes last year, the department said. This year, that number has dropped to 97.

Last week's Pennsylvania Budget and Policy Center study said a majority of drilling companies took advantage of loopholes or structured their businesses in ways that allowed them to not pay the corporate net income tax.