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Severance Taxes A Story of Volatility in Revenue and Prices

Severance taxes make up the most volatile tax revenue category. The average annual rate of growth of severance taxes for the last 26 years was 10.4 percent; however, the highest annual growth was 115.9 percent in FY 2022 and the deepest decline was 52.6 percent in FY 2002.

Severance taxes consist of oil and natural tax production taxes. FY 2022 collections totaled $10.83 billion – the highest annual collections on record – and contributed 14 percent to total tax collections.

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