Information Release

XT 2009-02 - Severance Tax Increase on Coal for Certain Permit Holders - Issued December 2009

The purpose of this release is to address a change in the rate to the Reclamation Forfeiture Fund for the extraction of coal.

The severance tax on coal is imposed on the entity extracting the natural resource, further requiring an additional rate for all permit holders that have not posted a full-cost bond for the acreage on which the mining operation is being conducted.  

Ohio Revised Code section 5749.02(A)(8) requires the chief of the Division of Mineral Resources Management to monitor the Reclamation Forfeiture Fund established under division (C)(2) of R.C.1513.08 and certify to the tax commissioner the amount of the balance of the fund as of the close of the biennium. R.C. 5749.02(A)(8) further provides for adjustments to the tax rate based on the ending balance of the fund.

On June 30, 2009, the Chief of the Division of Mineral Resources Management certified that the Reclamation Fund has a balance of less than $5 million. Therefore, R.C. 5749.02(A)(8) requires the rate to be adjusted to sixteen cents ($0.16) per ton, imposed on all permit holders that have not posted a bond.  This rate is effective Jan. 1, 2010. The severance tax return will be redesigned to apply the applicable tax rate for each location required.

Please contact the Excise Tax Section of this department with any questions.

                                                        Ohio Department of Taxation

                                                        Excise Tax Section

                                                        P.O. Box 530

                                                        Columbus, Ohio 43216-0530

                                                        Telephone:  (855) 466-3921

                                                        Fax:  (206) 350-6722

                                                        Web site: