Ohio Oil and Gas Association disputes tax rate study

As the Ohio House of Representatives debates hydraulic fracturing regulations, the Ohio Business Roundtable touted a study by Ernst & Young LLP that found Ohio's overall effective tax rate to be 80 percent below "the average rate for dry and wet gas wells in seven other states," while the executive vice president of the Ohio Oil and Gas Association, Tom Stewart, said the study was based on "several flawed assumptions," according to the Gongwer & Hannah Report. Stewart said the report underestimates the "upfront cost of drilling a horizontal well in deep shale formations," overestimates production of the wells, and fails to take into account the "tax abatements offered in other states and the 6 percent personal income tax rate that producers pay," the article said.