Nearby States Reap Millions from Gas Wells, but Not Arkansas

LITTLE ROCK, AR - A state report says that, if Arkansas taxed natural-gas well production at the rate imposed by Texas, it would have collected nearly $100 million in the fiscal year that ended June 30.  Using the current severance-tax rate in Oklahoma, Arkansas would have taken in $92 million for the gas extracted from its wells.  The Mississippi rate, applied to Arkansas, would have produced $79 million for the state, the report said, and even applying Louisiana's severance tax would have added $11.3 million to the state's coffers.

So, how much did Arkansas collect last year?  According to the report, $619,417.

Tim Leathers, deputy director of the state Dept. of Finance and Administration, discussed the report presented yesterday to the Legislature's Joint Committee on Economic and Tax Policy.  Leathers said the estimates of how much Arkansas would have collected using another state's tax rates were conservative and based only only on actual production in Arkansas last year.  He said the numbers would be higher in the future, if increased production in the Fayetteville Shale is taken into account.

(The Associated Press contributed to this report.)