Energy Tax Arguments Heat Up
Gross production tax fight intensifies
by Adam Wilmoth
One week into the legislative session, debate is intensifying on one of the most contentious issues facing the state’s oil and gas industry: deciding what to do with the gross production tax on oil and natural gas.
Rep. David Dank, R-Oklahoma City, on Thursday unveiled a plan that would set the gross production tax rate at 2 to 6 percent, depending on the number of Oklahomans each company employs.
“Chesapeake and Devon and Continental have buildings here in Oklahoma City that are full of their employees who are contributing to our economy,” Dank said. “When they drill and take oil and gas out of the ground, they’re contributing to Oklahoma by hiring our neighbors.”
The state historically has assessed a 7 percent tax on most production. In the late 1990s, the Legislature created a tax program rebating all but 1 percent to the tax paid on horizontal wells for the first 48 months of production. In 2010, the rebate was changed to an up-front tax credit. The current tax system is scheduled to expire next year.