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Committee tables hydrogen severance tax bill after administration and valuation concerns
Summary
The Minerals, Business & Economic Development Committee postponed action on House Bill 161, a proposal to impose severance taxes on hydrogen produced from water, after state tax administrators and industry witnesses said the measure needs more work on valuation, point of taxation and definitions.
The Minerals, Business & Economic Development Committee considered House Bill 161, a bill to impose severance taxes on hydrogen produced from water, but tabled the measure for interim study after testimony raised legal and administrative questions.
Vice Chair Ruben Tarver, who presented the bill, described it as “pretty short and sweet,” saying it would provide language to tax hydrogen produced from either produced water or fresh water. Tarver said the bill differentiates a lower tax rate for hydrogen made from byproduct (produced) water and a higher severance rate for hydrogen produced from water used as a feedstock.
The bill would apply two separate rates: a 3% rate for hydrogen made from byproduct water and a 6% severance rate for hydrogen produced from water used as a feedstock. Representative…
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