Gara, French Urge Governor to Promote Alaska’s Oil Incentives
Would-be producers need to know the breaks Alaska already offers for oil development
Today, Senator Hollis French and Representative Les Gara (both D-Anchorage) urged Governor Parnell to promote various tax breaks Alaska already offers in order to draw oil investment to Alaska. The two are concerned the incentives in Alaska's tax system and benefits of producing oil here are not getting the attention they deserve.
"We want to make sure that as we discuss the investment climate in Alaska, we remember that there are powerful incentives for companies to come here and do business in the form of royalty relief and investment tax credits," said Sen. French. "And the proof that those are working are in the profits."
"There is a lot to be said by the governor if he wants to bring jobs to this state. That's the call to the governor, to start advertising the tax breaks that work," said Rep. Gara.
In particular, the legislators say the state should promote its royalty reduction and tax credit incentives. The state will reduce the royalties a company is required to pay if the company can prove it needs the break to make a field economic. The state also offers between 30 and 40 percent tax credits on certain new fields.
"Under Alaska's royalty relief statute, if you prove you need a tax break for a field that is uneconomic under the current tax system, we give you a tax break. That's a powerful incentive," said Rep. Gara.
The legislators sent a letter to Governor Parnell last night requesting him to promote the oil taxation incentives already in place in order to help drive more investment to Alaska. Senator French and Representative Gara request that the administration promote these incentives in one-on-one meetings with independent developers, in targeted media advertisements, and at industry trade events.