Oil production has been the engine of economic growth in alaska. Thirtyfour states levy severance taxes, which are taxes on the extraction of natural resources including oil and natural gas. Oil going into the transalaska pipeline comes from one of several oil fields on alaskas north slope. Alaska oil and gas laws and regulations annotated is an essential handbook for attorneys and professionals working in the oil and gas industry in alaska comprehensive coverage includes statutes from oil and gas, public land, water, air, energy, and environmental conservation, public resources, public utilities and carriers, revenue and. Alaska department of revenue tax division oil and gas. Panelist on the international implications of the tcja for the oil and gas industry at the parker fielder oil and gas taxation conference november 21, 2019 presentation on mineral deed conveyance ambiguities at the oil and gas law conference hosted by the rocky mountain mineral law foundation october 24, 2019. Alaskas unusual oil tax credit system poses daunting budget. Mar 30, 2016 alaskas unusual oil tax credit system poses daunting budget challenge. Alaska oil and gas laws and regulations annotated by. Understanding alaskas revenue understanding alaskas budget. Alaskas oil and gas production tax tax credits history. The state of alaska offers a variety of tax credits to incentivize investment across the state. The ability to defer taxes is an important tax advantage for oil companies.
We pay this to small oil companies in cash, and to large oil companies by reducing production tax in the years after the loss. Alaska previously taxed the profits of oil companies at a 25 percent rate. Coalition of alaska business leaders oppose latest proposal to. Inexpensive trips to the gas station may put a smile on the average drivers face, but the ramifications are significant for economies dependent on oil. As a result, future analysis could have different results. Overview manual for valuation and assessment of oil and gas producing property in new york state public utilities. The ballot measure would boost production taxes on the oil industry by more than 300%, onealaska said in a statement on friday. Oil and gas taxation in the united states deloitte. Gaffney first read henry georges masterwork progress and poverty as a high school junior. Sep 15, 2019 oil companies pay a lot less in taxes compared to most other companies.
Recent judicial developments in state income taxation of the. Apr 29, 2014 why alaska is reconsidering texasinspired oil tax cut. Oil and gas taxation in the united states deloitte taxation and investment guides 2 2. Comprehensive coverage includes statutes from oil and gas, public land, water, air, energy, and environmental conservation, public resources, public utilities and carriers, revenue and taxation, and many more. View a sample of this title using the readnow feature. Reliable information about the coronavirus covid19 is available from the world health organization current situation, international travel. Comprehensive coverage includes statutes from oil and gas, public land, water, air, energy, and environmental conservation, public resources, public utilities and carriers, revenue and. The problem of the states inadequate tax base was remedied by the discovery in 1968 of the north slope oil fields, which led to the creation of the transalaska pipeline, thereby creating jobs and increasing revenue for the state. Study 75 terms apes final semester 2 flashcards quizlet. Financial reporting in the oil and gas industry international financial reporting standards 3rd edition 19 july 2017. Miller rather boldly declares that, if oil companies had known at financing what they know today about prices, costs and taxes, they would never have developed alaskan oil over the last 50 years.
Oil and gas taxation in the united states deloitte taxation. To provide historic and forecasted alaska oil and gas production data. What percentage of the cost of gas in alaska comes from taxes and gas station profit. Department of revenue navigation menu home treasury tax child support services permanent fund dividend navigation menu home treasury tax child support services permanent fund dividend home.
Also, the oil and gas tax credit information has been revised to. As 43 revenue and taxation fy2021 governor released january 2, 2020. Alaska oil and gas laws and regulations annotated is an essential handbook for attorneys and professionals working in the oil and gas industry in alaska. Department of revenue navigation menu home treasury tax child support services permanent fund dividend navigation menu home treasury tax child support services permanent fund. Estimating oil and gas revenues in light of the highly volatile oil and gas market coupled with uncertainties in. Small oil companies can sell these credits to larger oil companies, who can use them to reduce production tax even to zero. Aug 28, 2015 thats right a tax on oil and gas production is actually going to gift producers more money than it brings in. The prudhoe bay oil field, the one most commonly associated with the pipeline, contributes oil, as do the kuparuk, alpine, endicott, and liberty oil fields, among others. With oil prices rising, the independent institute is releasing the new book, taxing energy. We welcome your comments and suggestions to better serve your needs. Group submits petition books, setting stage for costly. Derived from alaska department of revenue, revenue sources book, fall 20, table e1a. Natural gas from the north slope is not marketable for lack of a gas transportation system.
This book gives information about regulations affecting taxation of the oil and gas industry. Oil and gas taxation is a collection of four major revenue items that fund most of alaskas operations. Numerous and frequentlyupdated resource results are available from this search. Mason gaffney born october 18, 1923 is an american economist and a major critic of neoclassical economics from a georgist point of view. Oil and gas production tax alaska department of revenue. Understanding alaskas revenue t he revenue picture in alaska is strikingly different than in other states. The state of alaska imposes a production tax, under as 43. Oil and gas taxation in the united states deloitte taxation and investment guides 4 a foreign corporation is generally not taxable on gains from the sale of many types of personal property, unless derived. New rules for colorado oil and gas pipelines to be. The taxation of natural resources is one of the more complicated areas of the u. A group seeking to raise taxes on major oil producers in alaska on friday rolled a flatbed dolly stacked with boxes of signature books to the alaska division of elections office in anchorage.
Alaska gasoline and fuel taxes for 2020 salestaxhandbook. Alaskas presentday economy is based on oil production, fishing, federal and state both civilian and. Many examination features in the oil and gas industry are common to commercial enterprises but the handbook will highlight those areas peculiar to the industry. Both the new oil production tax, known as sb21 or mapa more alaska production act, and the one it replaced last yearaces alaskas clear and equitable sharehave the same tax. The diagram above shows how the prices of an average gallon of gasoline and diesel fuel are broken down among various components, including the cost of the crude oil, refining, distribution marketing, and taxes. Except as otherwise provided under f, j, k, and o of this section.
Then came 2015, when the tax raised virtually no revenue at all, putting intense pressure on the states other limited forms of taxation. Historic production based on reported company activity as of fall 2017, from 1959 to 2017. The department of commerce, community, and economic development is working to understand the fast paced and everchanging effects of covid19 on alaska and our communities. For alaska, this report does not segregate production and tax between gas and oil.
And each change in the statutes brings additional changesand complicationsto the. Jan 30, 2017 alaskas oil and gas taxation status report presentation to house resources committee ken alper, tax division director alaska department of revenue january 30, 2017. Oclcs webjunction has pulled together information and resources to assist library staff as they consider how to handle coronavirus. Department of commerce, community, and economic development. That is why, even when gross value served as the states oil and gas tax base, the effective rate. Such a rate would be ruinousin fact, impossiblewere it imposed on gross revenue, as is common in other states. Deepwater horizon blowout, environmental management. No less than seven kinds of taxes play, or have played, major roles in the states taxation of oil and gas. The most recent statutes, regulations, ruling, and court decisions are examined, and their effects on this years tax accounting are explained. America could also use proceeds from its robust oil and gas. At its most recent peak in 2012, oil and gas production taxes.
Bruce johnson, and three of his colleagues in the department of economics, university of california at santa barbara. Executives book examines alaska oil costs and benefits fairbanks on the first page of the last alaskan barrel, john m. Another is the production tax rate and the tax credits under existing law. Oil and gas law and taxation hornbooks by owen anderson, john dzienkowski. There have been no significant changes in tax law since 2015. Alaska department of revenue tax division reports page. The current tax rate of 35% was set in 20 by senate bill 21 commonly known as the more alaska production act or mapa. This includes both the juneau and anchorage offices and lobbies.
Reporting from alaska state law allows hilcorp to avoid. Alaskas oil production tax is broken anchorage daily news. The alaska oil and gas production tax has been changed multiple times particularly over the last 12 years. Alaska department of revenue, fall 2012 revenue sources book. Few states are feeling this more acutely than alaska. We provide accurate and timely information to alaska taxpayers. Alaskas oil and gas production tax is now a corporate. Overview manual for valuation and assessment of oil and. The first purchaser of crude oil in texas must pay tax based on crude oils market value. Valuation and assessment of oil and gas home table of. Alaskas oil and gas production tax system gives tax credits to large producers that reduce their tax liability, and also hands out credits to small producers see figure 1. Recent judicial developments in state income taxation of. Oil and gas value chain and significant accounting issues the objective of oil and gas operations is to find, extract, refine and sell oil and gas, refined products. Alaska oil and gas laws can be found in title 31 and title 38 of alaska statutes.
The tax division offices are closed to the public until further notice. The collection includes the materials strohmeyer used in the writing of his 1993 book on the transalaska pipeline and oil development in prudhoe bay, extreme conditions. The book concludes with a glimpse at future oil and natural gas potential in. Oil tax policy 30th leg 20172018 oil tax policy 29th leg 20152016 archives. Alaska oil tax myths, surprise, remain busted anchorage. This is based on advice from alaska officials who stated, the net effective tax on gas is a negative, thus we have combined gas and oil in our computations. As colorado aims to gather more information about oil and natural gas pipelines, driven by the fatal firestone home explosion in april 2017, questions are rising about how much information can.
Alaska oil and gas laws and regulations annotated, 2019 edition. The first texas oil boom arrived in the summer of 1894 when the corsicana oilfield is discovered by a drilling contractor hired by. The revenue from these taxes is extremely volatile because it rises and falls with the price and production of natural resources. Department of revenue revenue sources book fall 2016. Alaska has a lot of what other states wish they had more of oil and gas royalties and none of what other states wish they had less of personal income and state sales tax. While we are charged with collecting state taxes and administering tax laws, we also regulate charitable gaming and provide revenue estimating and economic forecasting. It also covers in detail both income tax and the windfall profit tax. The oil and gas tax initiative is going to lead to a healthy statewide conversation on the topic, which has been suppressed for too long by gridlock in state government.
History of oil and gas taxes in alaska four main sources of state of. An oil and gas attorneys services include advice on acquiring subsurface and mineral rights, title examinations for oil and gas exploration and production,a oil well drilling, permits to drill, oil production, gas transport, storage and distribution, oil and gas royalties, taxation, valuation, land use, and land rights. Group submits petition books, setting stage for costly fight over. Aug 28, 2018 online book clubs to join while selfisolating. An economic unit is defined as real property, subject to taxation and assessment, including the oil and gas. Energy production and extraction book 2 by johnathan borg 5. Revenue sources book alaska department of revenue state of. It wasnt that long ago that alaska had years when as much as 90 percent of state revenue came from the oil and gas production severance tax. Oil going into the trans alaska pipeline comes from one of several oil fields on alaska s north slope. A carries petroleum from northern alaska to the gulf of alaska b carries natural gas from gas fields near keystone, south dakota, to the eastern us c is a hotly debated pipeline that would carry petroleum from canada to the southern us d is a hotly debated oil pipeline that would pass through montana, idaho, utah, nevada and arizona. According to a 2009 report from the states taxation and revenue department, the combined tax and royalty rate for oil 20. Assess how different fiscal terms impact investment decisions through a comprehensive, handson, practical course for government and oil and gas industry executives. Cumulative north slope production at yearend 1993 was 9.