Archive for the ‘gross production tax’ tag

From the Archives: I don’t need it but I’ll take it – Revisiting oil and gas tax breaks

by | September 28th, 2011 | Posted in Taxes | Tagged with , , , , , , , | with 1 comment

Note: This afternoon, the Task Force for the Study of State Tax Credits and Economic Incentives will be examining gross production tax exemptions. This blog post on the subject initially ran in March 2011.

A recent news report examining proposals to limit the federal tax deduction for charitable giving concluded with a comment that gets to the crux of the debate over tax breaks:

As one donor explained, he doesn’t give to charity to get a deduction — but he’ll take it if it’s there.

It seems as though Oklahoma oil and gas producers think the same way.

State tax breaks ranked last among 10 variables cited by Oklahoma oil industry executives as affecting their decision to drill, according to the findings of  a non-scientific 2008 survey by Oklahoma City University economics professor Steven Agee. However, most producers will gladly take them when they’re there: Agee found that 83 percent of respondents had claimed a gross production tax rebate. Read the rest of this entry »

Oil strikes back

by | March 1st, 2011 | Posted in Budget | Tagged with , , , , , , , | with 3 comments

When the Board of Equalization met last week and certified more revenue for the upcoming fiscal year, there was one word on everyone’s mind: Oil. Of the total $106 million increase in the February estimate compared to the Board’s initial estimate in late December, $64.3 million was attributable to expectations of higher oil revenues.  Higher revenue projections were based on the assumption of rising oil prices – the Tax Commission is forecasting an average FY ’12 price of $90.77 per barrel -  and increased production.

If these assumptions prove true, they will continue a rather dramatic shift in Oklahoma’s since 2008 as oil production has caught up to or surpassed natural gas production as an engine of growth in the energy sector.  After peaking in mid-2008, the price of both oil and natural gas plummeted in late 2008 and early 2009. Since then, the price paths of the two commodities, which usually move closely in sync, have diverged sharply, with oil reaching just under $90 per barrel in January 2011 while natural gas remains stuck at close to $4.00 per MCF. Read the rest of this entry »

Time to cap the tax credit well?

by | May 1st, 2009 | Posted in Taxes | Tagged with , , | leave a comment

OK Policy has released a new fact sheet looking at Oklahoma’s gross production taxes on oil and gas,which takes a special look at the tax exemptions offered for different forms of production. Over the past five years, producers have claimed $339 million in exemptions, or rebates, from the gross production tax, with almost three-quarters of the rebates claimed for deep well drilling and horizontally drilled wells, according to data supplied by the Oklahoma Tax Commission.

Most gross production tax exemptions are set to expire on June 30, 2009. The Legislature is considering two bills – HB 2062 and SB 313 that would extend the exemptions through 2012. So far, both bills have sailed through the legislative process with a minimum of debate. However, the titles have been stricken from the bills and they look headed to conference committee, which ensures that the Legislature will have at least one more opportunity to consider the matter before any extension of the tax exemptions is sent to the Governor.

Read the rest of this entry »