Signed by Governor Bill Walker

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that restructures the oil tax and credit system.

Highlights:

• Repeals provisions that established the state oil and gas fund and permitted cash purchase of tax credit certificates (Sec. 30).

• Specifies that the state oil and gas fund cannot be used to purchase tax credit certificates for credits earned after January 1, 2018 (Sec. 18).

• Authorizes taxpayers to apply an alternative oil and gas exploration tax credit earned for expenditures prior to July 1, 2016 (Sec. 2).

• Authorizes taxpayers to apply various tax credits earned under this chapter to an applicable tax at any time provided that such tax burden is for a calendar year prior to the year in which the credit was earned and such tax has not been to subject to litigation (Sec. 4, 7, & 14).

• Specifies that production tax credits earned for exploration expenses prior to July 1, 2016 may be used to lessen an individual’s tax burden, provided that the tax burden for a given year is not reduced below zero (Sec. 15).

• Extends a taxpayer’s ability to transfer unused tax credits to another individual indefinitely (Sec. 6).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass with amendment to a bill that restructures the oil tax and credit system.

Highlights:

• Repeals provisions that established the state oil and gas fund and permitted cash purchase of tax credit certificates (Sec. 30).

• Specifies that the state oil and gas fund cannot be used to purchase tax credit certificates for credits earned after January 1, 2018 (Sec. 18).

• Authorizes taxpayers to apply an alternative oil and gas exploration tax credit earned for expenditures prior to July 1, 2016 (Sec. 2).

• Authorizes taxpayers to apply various tax credits earned under this chapter to an applicable tax at any time provided that such tax burden is for a calendar year prior to the year in which the credit was earned and such tax has not been to subject to litigation (Sec. 4, 7, & 14).

• Specifies that production tax credits earned for exploration expenses prior to July 1, 2016 may be used to lessen an individual’s tax burden, provided that the tax burden for a given year is not reduced below zero (Sec. 15).

• Extends a taxpayer’s ability to transfer unused tax credits to another individual indefinitely (Sec. 6).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that restructures the oil tax and credit system.

Highlights:

• Raises the minimum tax levied on oil and gas produced on or after January 1, 2018 and before January 1, 2022 from 4 percent to 5 percent of the gross value at the point of production (Sec. 2).

• Reduces the tax credit that a producer or explorer may elect to take for lease expenditures incurred in exploration, development, or production in the North Slope region from 35 percent to 15 percent of a carried-forward annual loss (Sec. 5).

• Authorizes the Department of Revenue, upon the written application of an individual to whom a transferable tax credit certificate has been issued, or to whom a production tax credit certificate has been issued, to use available money in the oil and gas tax credit fund to purchase, in whole or in part, such certificate (Sec. 9).

• Reduces the total amount of tax credit certificates that the Department of Revenue may purchase from a single entity in 1 year from $70 million to $35 million (Sec. 9).

• Specifies that all barrels of oil sold at less than $110 per barrel are eligible for a monthly tax credit of $5 per barrel (Sec. 7).

• Specifies that taxes on oil and gas produced in the North Slope region cannot be lessened by the application of tax credits (Sec. 3 & 4).

• Specifies that taxes on oil and gas produced elsewhere can be lessened by the application of tax credits, but that the total amount of tax credits claimed for a calendar year cannot exceed the sum of all tax credits claimed on each monthly estimated tax installment payment for such year (Sec. 3).

• Repeals a provision stating that after the first 3 years after a tax becomes delinquent, such tax does not bear interest (Sec. 1).

Full Bill Text