SEVERANCE TAX Definition

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SEVERANCE TAX is levied on production of natural resources taken from land or water bottoms within the territorial boundaries of a state.

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LEASE RATE FACTOR is the periodic lease or rental payment expressed as a percentage (or decimal equivalent) of equipment cost. Used to calculate payments given the cost of equipment (e.g. A lease rate factor of 0360 on an equipment cost of $5,000.00 requires a monthly payment of $180.00 (0360x$5,000.00=$180.00).

ADJUSTED BASIS see BASIS.

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