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Governor Parnell Offers Amendments to Oil and Gas Production Tax


Lowering Marginal Tax Rate Aimed at Job Creation

January 17, 2011, Anchorage, Alaska In a move to increase Alaska’s competitiveness as a petroleum province, thereby adding jobs and stemming recent production declines, Governor Sean Parnell has introduced a bill for new tax incentives and credits for oil and gas exploration and development.

“We remain committed to getting more oil into the pipeline and increasing job opportunities for Alaskans,” Governor Parnell said. “As oil production declines and as the federal government moves on several fronts to block responsible projects, we must offer more incentives for development of state lands.”

Governor Parnell’s bill:

  • Establishes a lower base tax rate for areas outside of current fields and units to encourage development of undeveloped leases or properties;

  • Caps overall production tax rates to encourage investment at most commodity prices;

  • Establishes a bracket system based on existing ACES tax rates;

  • Extends tax incentives available in Cook Inlet to the North Slope to encourage in-field drilling in existing units;

  • Limits the time for assessment of additional production taxes; and

  • Reduces the interest rate on delinquent taxes and refunds.

These changes are aimed at ensuring that the state continues to receive fair compensation for the sale of its resource while establishing a more competitive investment climate for job creation.

Governor Parnell said that Alaskans expect that in exchange for lower taxes, more Alaska jobs will be created.

A copy of the bill is available at:

http://gov.alaska.gov/parnell_media/resources_files/OilGasTaxBill.pdf

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