Published: March 7, 2022 |

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The Wyoming House of Representatives passed a bill on Tuesday that would reduce the severance tax on coal from 7 percent to 6.5 percent.

“It’s a fair change, because there’s a 7 percent severance tax on coal, and it’s only 6 percent on natural gas and oil,” Rep. Tim Hallinan, R-Campbell County, told the House ahead of the vote.

“And they’re the chief competitors for coal. So if we want to give coal a fair shake, we should lower their severance tax,” Hallinan added.

Over the last decade, the 1 percent difference amounted to $250 million more in taxes paid by the coal industry, Hallinan said.

“That is not a small figure. The companies that suffered throughout this time period, and some of them went bankrupt and went under, they could’ve had $250 million, possibly, to survive this rough time they’ve been through,” Hallinan said.

Hallinan warned that the current economic strain on Wyoming’s coal companies could bring the industry to an end.

Opponents of House Bill 105 argued that reducing the severance tax wouldn’t do much to help the multi-state and international companies operating Wyoming’s biggest mines, and would instead cost the state an estimated $10 million per year, primarily from the general fund.

“I think we all understand that it’s not based on the tax rate, it’s based on market demand, on whether coal is dug out of the ground. Why are we giving $10 million away?,” said Rep. Mike Yin, D-Teton County.

Rep. Jim Roscoe, I-Lincoln, Sublette, and Teton counties and a member of the House Revenue Committee, voted against the bill in committee. He later proposed an amendment that would require coal companies’ severance savings to stay in Wyoming or otherwise be used to support the state’s coal industry.

“When we lower our severance tax, the money leaves Wyoming. We’re appropriating money out of our state. The largest operator in Wyoming has mines in seven different states and also major operations in Australia,” Roscoe said.

Roscoe withdrew the amendment ahead of the third reading of the bill.

House Bill 105 passed the House by a margin of 40-19 and was referred to the Senate Minerals, Business and Economic Development Committee.

Source: Casper Star Tribune

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