DEFINITION of 'Gross Production Tax'

A state tax imposed on companies that generate revenues by depleting non-renewable resources. Such companies include producers of oil and gas, coal miners and miners of metals and minerals. Gross production taxes are normally introduced as a means of compensating the state for the pollution that miners emit.


Also known as severance tax.

BREAKING DOWN 'Gross Production Tax'

One method of calculating the gross production tax is as a percentage of gross value based on the average monthly product price. This tax is generally deductible from the company's federal tax. Some states may also charge an extraction tax on top of the gross production tax.

RELATED TERMS
  1. Depletion

    Depletion is an accrual accounting method that's used to allocate ...
  2. Selfish Mining

    Selfish mining is a bitcoin mining strategy that maximizes profits ...
  3. Energy Trust

    An energy trust is a type of corporation that exists solely to ...
  4. Gross Income

    Gross income is the total income from all sources before deductions ...
  5. Proof of Capacity (Cryptocurrency)

    Proof of Capacity consensus mechanism uses a mining node’s hard ...
  6. Gross Receipts

    Gross receipts are the sales of a business that form the basis ...
Related Articles
  1. Investing

    Will Gold Mining ETFs Ever Be a Buy?

    ETF investors have numerous choices with gold ETFs, but most concentrate on the gold miners or the commodity.
  2. Investing

    GDX: Market Vectors Gold Miners ETF

    Learn about Market Vectors Gold Miners, one of the most volatile ETFs in the market, which fell 75% from 2011 to 2015 after climbing 300% from 2008 to 2011.
  3. Tech

    Bitcoin Cash Miners Took a Loss on Purpose

    When bitcoin cash became substantially more difficult to mine, it saw its profitability decrease. And yet, some miners continued to focus on it. Why?
  4. Investing

    How High Can the Gold Miners ETF Go? (GDX)

    Gold miners have been one of the hottest trades of the year. Is there more room to run with this ETF?
  5. Investing

    3 ETFs Your FA Should Have Recommended This Year (RING, GDX)

    Learn about the top-performing ETFs in early 2016 that contain no leverage or short-selling ability, and discover how gold's rally has influenced the results.
  6. Investing

    Traders Flock to Leveraged Gold Miners ETFs

    Once again, leveraged bullish gold miners ETFs are popular with active traders.
  7. Investing

    4 ETFs For Trading Gold's Falling Prices

    Traders looking to trade gold will likely look to add these for funds to their portfolio.
  8. Taxes

    Use Tax Vs. Internet Sales Tax: How Are They Different?

    Learn about the differences between a use tax and an Internet sales tax. Find out about transactions in which the taxes apply, and to whom they apply.
  9. Taxes

    States Without Sales Tax

    There are five states that do not charge sales taxes, instead, they other taxes the states levy instead in order to generate revenue.
  10. Trading

    3 Charts That Suggest Gold Miners Are Headed Lower

    Nearby resistance on these charts suggests that the gold mining industry is setting up for a long-term move lower.
RELATED FAQS
  1. What is the metals and mining sector?

    The metals and mining sector is the industry dedicated to the location and extraction of metal and mineral reserves around ... Read Answer >>
  2. What criteria classify a company as a junior gold miner?

    Learn about junior gold miners, companies that exclusively mine for gold. These firms typically rely on venture capital and ... Read Answer >>
  3. What is the difference between a state income tax and a federal income tax?

    Learn the difference between state income tax and federal income tax based on tax rates, deductions, tax credits and taxable ... Read Answer >>
  4. Are gross sales and taxable gross sales the same thing?

    Learn the difference between gross sales and taxable gross sales and how these terms relate to the profit and tax liability ... Read Answer >>
  5. What is the difference between gross income and earned income?

    The difference between earned income and gross income is an important one come tax time. Find out how the IRS uses both to ... Read Answer >>
Trading Center