A bill likely to be passed within the next two weeks will mean smaller roy­alty pay­ments for peo­ple who have leased their land for oil and nat­ural gas drilling.
The lan­guage is part of Sen­ate Bill 1541 — scroll to the bot­tom of this post to read it —  an omnibus tax bill intro­duced by Sen­ate Repub­li­can Pat Browne last month. It requires energy com­pa­nies to auto­mat­i­cally with­hold the 3.07 per­cent of roy­alty pay­ments that landown­ers would owe in state taxes.
The Cor­bett Admin­is­tra­tion came up with the pro­posal, and Gov­er­nor Cor­bett has asked House and Sen­ate lead­ers to pass it along­side the state bud­get, which needs to be signed into law within the next 12 days.
Depart­ment of Rev­enue spokes­woman Eliz­a­beth Bras­sell com­pares the setup to employer tax with­hold­ings. “This change would allow the depart­ment to more quickly and accu­rately col­lect income tax due on roy­alty pay­ments, par­tic­u­larly in the case of non-residents,” she wrote in an email.
The “non-residents” Bras­sell is refer­ring to are peo­ple who live out-of-state, but own Penn­syl­va­nia land where drilling is tak­ing place.
This would not be a tax increase. Landown­ers are already required to pay taxes on their roy­alty pay­ments, but are tasked with report­ing and pay­ing the levy themselves.
While taxes aren’t going up, the Depart­ment of Rev­enue says improved doc­u­men­ta­tion of roy­alty pay­ments would lead to a $5.3 mil­lion increase in tax col­lec­tions next year, and about $2 mil­lion more a year going forward.
Penn­syl­va­nia took in $46 mil­lion from taxes on drilling roy­al­ties in 2010 — that’s up from $35 mil­lion in 2009. (2011 fig­ures aren’t avail­able yet.)

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Automatic Lease Withholding 
Lease Withholding: Required Documentation 
Contributed by: Scott Detrow, National Public Radio