Alaska’s oil and gas production tax has been subject to continuing debate and change as lawmakers and policymakers struggle with balancing budgets in times of volatile oil prices while also encouraging the investment necessary to monetize the state’s resources to run its government, create jobs, build and maintain infrastructure, and promote economic activity. In my second article as a columnist for State Tax Notes, I provide:

  • A review of the oil and gas production tax and how it has evolved into several different structures in response to the locations of resources, population centers and developed infrastructure within the state.
  • An overview of how tax credits have evolved since 2005 — when the primary credit was meant to encourage exploration for oil and gas — as the Alaska Legislature revised the production tax and enacted new credits over the years designed to spur exploration and development activity, attract new entrants to the state, and increase production in existing fields.
  • A look at how — even as the production tax credit structure has proved to be an effective incentive for oil and gas exploration, development and production — lawmakers and policymakers, faced with low oil prices, rising budget deficits and the price tag that came with rebatable tax credits, have targeted some of the credits for reduction or elimination.

Read the article here.

Originally published as “Alaska’s Tax Credit Showdown” on April 2, 2018, by State Tax Notes.

A link to my first column can be found here.