Finance Committee Releases Version Of Oil Tax Overhaul
The House Finance Committee released their version of a bill that would overhaul the state’s oil tax policy on Thursday. It’s forecasted to cut taxes by $3.5 billion over the next five years, a smaller amount than the last proposal. That number is expected to appease swing votes on the bill.
Like all other drafts of the bill, the House Finance version would get rid of progressivity, a mechanism that raises taxes on oil as the price per barrel goes up. Instead, it would set a tax ceiling of 35 percent for all oil. When it comes to oil extracted from legacy fields, producers would get a credit that operates on sliding scale of sorts, with that credit getting smaller as oil companies are seeing higher profits. At a price of $80 per barrel, producers would get an $8 per barrel credit, with the credit disappearing entirely if prices climb past $150 per barrel.
It would treat new oil somewhat differently. The state would let a fifth of oil coming from new fields go tax free, while offering a flat $5 per barrel credit on the rest of it.
With the legislature scheduled to gavel out on Sunday, this should be one of the last major revisions of the bill.