Oil and gas audits if you are in the oil and gas business, the following is a synopsis of what to expect during an audit of your business by the internal revenue service. For pricing or to place an order, please contact us at 18773948826. However, it was the discovery of the giant prudhoe bay oil field on alaska s north slope in 1967 that established alaska as a worldclass oil and gas province. The current tax rate of 35% was set in 20 by senate bill 21 commonly known as the more alaska production act or mapa. As of 2017, republicans have attempted to allow drilling in anwr almost fifty times, finally being successful with the passage of the tax cuts and jobs act of 2017. The question of whether to drill for oil in the arctic national wildlife refuge anwr has been an ongoing political controversy in the united states since 1977. Fal l 2018 revenue sources book alaska department of revenue. Senate oil and gas tax credit working group background the subject of oil and gas tax credits tax credits was a topic of discussion throughout the 2015 regular session, extended session, and the first and second special sessions.
Supreme court hears arguments over bill to pay off credits. 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. Alaskas oil production tax is broken anchorage daily news. Oil and gas privilege tax on production 8% of gross value at point of production. Industry, legislators and signature gatherers ready for another big oil tax fight. And each change in the statutes brings additional changesand complicationsto the. Group submits petition books, setting stage for costly fight over. Alaskas oil and gas production tax is now a corporate. For future generations, a portion of the states oil revenues was set aside in 1976. Comprehensive coverage includes statutes from oil and gas, public land, water, air, energy, and environmental conservation, public resources, public utilities and carriers, revenue and. Understanding alaskas budget understanding alaskas. We provide accurate and timely information to alaska taxpayers. Federal income taxation 2009 is an invaluable singlesource handbook for accounting, tax and legal practitioners concerned with financial issues related to oil and gas industry tax law.
Oil and gas gross production tax imposition and rates the oil and gas gross production tax is imposed in lieu of property taxes on oil and gas producing properties. Alaska oil and gas association recognizes historic milestone of moving 18 billion barrels of oil down the trans alaska pipeline. Oil tax ballot measure will hurt alaska s economy, jeopardize new projects. Tax rates increased with price, and at the high oil prices of the time, tax rates and revenues were very high but that price spike masked several problems with aceslarge credits, cash payments to oil companies, and a tax based on net profits. The state of alaska offers a variety of tax credits to incentivize investment across the state. Alaska lawmakers have created a complex system of oil and gas tax credits, in part in an effort to bring new explorers into the state to fill the trans alaska pipeline. Alaska department of revenue tax division reports page. Under sb 21, there is certainty that tax rates wont fluctuate wildly at higher prices like they did under the old tax law. The state excise stands at 8 cents per gallon, to which an environmental surcharge worth 0. Alaska oil tax initiative has enough signatures for ballot. Oil and gas production taxes and oil surcharge chapter 56.
This includes both the juneau and anchorage offices and lobbies. Annual industry projections for alaska, anchorage, the fairbanks area, and southeast alaska. 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. Operators are generally able to book their net reserves. While the list is not exhaustive, it will provide an excellent introduction. Federal income tax 35% top rate federal alternative minimum tax amt 20% federal withholding tax o dividends 30% o interest 30%. Alaskas oil investment tax structure commonwealth north. Kay fanning, former editor, anchorage daily news and the christian science monitor this sharply written book wonderfully evokes the exciting and colorful history of the oil industry in alaska. Oil tax policy 30th leg 20172018 oil tax policy 29th leg 20152016 archives. Understanding alaskas revenue t he revenue picture in alaska is strikingly different than in other states. Justices on the alaska supreme court heard oral arguments thursday morning in the lawsuit over oil and gas tax credit bonds that could have major ramifications for the states financial future. What percentage of the cost of gas in alaska comes from taxes and gas.
Property overview irs examiners will focus on and you should become familiar with the concepts of mineral interests and property. Updated and revised by noted oil and gas taxation authority and educator, patrick a. Oil and gas taxation in the united states deloitte. The tax division offices are closed to the public until further notice. Alaska oil and gas corporation net income tax return. Two years later, the discovery of the nearby kuparuk field, the secondlargest in north america after prudhoe bay, confirmed alaska s position. New amortization rules for major integrated oil companies provided in the tax increase prevention and. Juneau, alaska ap an alaska legislative committee on tuesday unveiled a draft oil and gas tax credit bill aimed at breaking an impasse that helped send lawmakers into overtime, proposing to. Alaska residents to receive record payment from oil. A 5% rate is applied to the gross value at the well of all oil produced, except royalty interest in oil produced from a state, federal or municipal holding and from.
The amount of recoverable oil in the field is more than double that of the next largest field in the united states by acreage the east texas oil field, while the. Oil and gas production returns and credit applications must be filed through revenue online at tax. Included in the gasoline, dieselkerosene, and compressed natural gas rates is a 0. 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 taxation, and many more. Frontier, iversen discusses alaskas oil and gas production tax credits. Prudhoe bay oil field is a large oil field on alaska s north slope. Historic oil price burns hole in state budgets tax foundation. Two states, alaska and north dakota, collect revenue primarily from. Alaska s government retaliates after goldman sachs drops arctic oil. We promote tax compliance through quality service and fair administration. These tax rates are based on energy content relative to gasoline. The trump administration is finalizing plans to allow oil and gas drilling in a portion of the arctic national wildlife refuge that has been protected for decades the bureau of land management. Alaskas oil and gas fiscal regime alaska department of revenue. Alaskas oil and gas production tax tax credits history.
Oil and gas exploration, production, and pipeline transportation property taxes chapter 57. Oil and gas taxation in the united states deloitte taxation and investment guides1 1. Shepards citations for alaska, arizona, colorado, hawaii, idaho, kansas, nevada, new mexico, oklahoma, oregon, utah, washington and wyoming to supercharge your research capability. At its most recent peak in 2012, oil and gas production taxes. Federal income taxation 2007 is an invaluable singlesource handbook for accounting, tax and legal practitioners concerned with financial issues related to oil and gas industry tax law. Alaska legislative panel releases oil, gas tax credit. A gross wellhead tax would be simpler and serve us better. Fall 2019 revenue sources book predicts more oil than was forecast under old tax system. Compare alaskas oil and gas production, reserves, and undiscovered.
The list is also useful for the study of oil and gas taxation. Anchoragebased oil and gas lawyer robin brena, a primary sponsor of the initiative, has said the state. The ballot measure would boost production taxes on the oil industry by more than 300%, onealaska said in a statement on friday. Use this site to search case files for state and blm land. Authoritative industry references are available in exhibit 4. Search the division of oil and gas collection of maps and displays related to oil and gas activity in alaska. Alaska oil production tax alaska will impose a base rate of 35 percent on oil companies net profits in the state. Includes the annual actuarial study and financial handbook, tax rates and the tax calculation process, and links to related information. The alaska oil and gas production tax has been changed multiple times particularly over the last 12 years. Senate bill 236, house bill 280, and senate bill 309 signed in 2010, by governor sean parnell, created new tax credits and amended some provisions of the tax.
Alaska oil and gas laws and regulations annotated 2015. Senate bill 21, aka the more alaska production act mapa, was signed by governor sean parnell on may 21, 20. Trump opens protected alaskan arctic refuge to oil. The state of alaska imposes a production tax, under as 43. In the case of small producers, these credits are allowed to exceed a producers entire tax. It is the largest oil field in north america, covering 2,543 acres 86,418 ha and originally containing approximately 25 billion barrels 4. Oil and gas has been good to alaska, providing jobs and revenue the petroleum industry supports onethird of all alaska jobs, generating 110,000 jobs throughout the state. Alaska s gas tax is the lowest in the nation, and the base excise has not been changed since 1970. Alaskas government retaliates after goldman sachs drops. While we are charged with collecting state taxes and administering tax laws, we also regulate charitable gaming and provide revenue estimating and economic forecasting. Alaska s 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. Also, the oil and gas tax credit information has been revised to.
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