Gov. Bobby Jindal considering elimination of taxes on oil and gas extraction

Louisiana Republican Gov. Bobby Jindal is weighing the elimination of taxes on oil and gas extraction as part of a larger plan to end all personal income and corporate taxes while raising the state’s sales tax to offset the lost revenues. reports that no decision has been made on whether or not any final version of the plan will include repealing taxes on oil and gas extraction — so-called severance taxes — but that all other taxes, except property taxes are on the table.

“These revenue streams are currently under review and will remain so for the immediate future,” said Louisiana Department of Revenue spokesman Doug Baker.

However, the taxpayer advocacy group Americans for Tax Reform has come out in support of Jindal’s broader tax plan, saying it will be the most pro-growth tax reform to happen in decades.

“Gov. Bobby Jindal’s announcement that he will seek to eliminate personal and corporate income taxes in Louisiana, puts the Pelican State at the front of the tax reform wave sweeping state capitols across the country this year,” Patrick Gleason, director of state affairs at ATR, said in an email.

“No income tax states outperform high income tax states in economic growth, job growth, population growth, and even revenue growth,” Gleason added. “Gov. Jindal’s proposal would greatly improve his state’s business tax climate and could very well set the gold standard for state tax reform when it is all said and done.”

However, nixing the severance tax could lose the state the projected $774 million in revenue it will collect in the next fiscal year.

According to, severance tax revenue goes back to the parishes where oil and gas extraction occurs and contributes to Louisiana’s Coastal Protection and Restoration Fund and rainy day fund.

In lieu of the severance tax, the state would still see revenues in the form of royalties from oil and gas companies when they lease state lands. These are projected to total $505 million next fiscal year.

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