XT 2007-02 - Severance Tax Increase on Coal - Issued March
The purpose of this release is to address an amendment to
Ohio Revised Code section (R.C.) 5749.02 that increases the
severance tax on coal mined in this state (see Sub. H.B.
443). The severance tax is imposed on the entity extracting
natural resources. It is possible that each mine could
be subject to a different tax rate depending on the mining
method and the amount of the bond posted for each location.
The Ohio Department of Natural Resources will provide the
information necessary to determine the tax rate that is
applicable to each of your locations. All of the following
tax rate changes are effective April 1, 2007:
- The base severance tax rate imposed on all coal severed in
Ohio will increase from nine cents ($0.09) per ton to ten
cents ($0.10) per ton.
- An additional tax of one and two-tenths cents ($0.012) per
ton is imposed on all coal severed using the surface mining
- An additional tax in the amount of fourteen cents ($0.14)
per ton is imposed on all permit holders that have not posted
a full-cost bond for the acreage on which the mining
operation is being conducted. R.C. 1513.08 provides that this
tax shall not be levied if a permitted location carries a
bond sufficient to cover the reclamation costs without
reliance on the reclamation forfeiture fund. The rate of this
levy may be adjusted every two years. This rate may increase
up to a maximum of sixteen cents ($0.16) per ton or decrease
to a minimum of twelve cents ($0.12) per ton, depending on
the balance in the reclamation forfeiture fund at the end of
each fiscal biennium.
The severance tax return has been redesigned to include a
schedule that taxpayers can use to report the quantity of
coal extracted from each mining location and to apply the
applicable tax rate to each location.
Please contact the Excise Tax Section of this department with
Ohio Department of Taxation
Excise Tax Section
P.O. Box 530
Columbus, Ohio 43216-0530
Telephone: (614) 466-7026
Fax: (614) 728-1806
Web site: tax.ohio.gov