Mcdaniel Rejects Nelson Severance Tax Proposal

On Tuesday, Attorney General Dustin McDaniel rejected a proposed ballot initiative aimed at raising the state’s severance tax on natural gas to 7%.

Attorney, two-time GOP gubernatorial nominee, and former natural gas company executive Sheffield Nelson filed paperwork on Feb. 7 with the Attorney General’s office to lead an initiated act to raise Arkansas’ severance tax on natural gas to 7%.

Currently, severance tax rates range from 1.25% to 5% and include several "loopholes," according to Nelson.  Industry officials have complained in the past that comparing state-to-state percentages is not fair as other states offer a variety of exemptions. Nelson’s ballot title – "The Natural Gas Severance Tax Act of 2012" – would need 62,507 valid voter signatures eventually to qualify for the ballot if it can pass AG muster.

McDaniel cited confusing language in the text of the initiated act that he felt made it unclear to voters where the money would be directed.

"Having analyzed your proposed amendment, as well as your proposed popular  name and ballot title under the above precepts, it is my conclusion that I must reject your proposed popular name and ballot title due to ambiguities in the text of your proposed measure.  A number of additions or changes to your ballot title are, in my view, necessary in order to more fully and correctly summarize your proposal," McDaniel wrote.

You can read the full opinion at this link.