Some Oklahoma lawmakers and business leaders are calling for increased gross production taxes
In late March, faced with an $868 million budget shortfall and with few revenue-raising bills passed through the state Capitol, Oklahoma House Democrats crafted a budget plan to repair the state’s revenue problem by reversing specific tax cuts, including for oil and gas production.
In its Restoring Oklahoma Plan, which lays out a strategy for funding a teacher pay raise as well as protecting key government services from further budget cuts, the Democratic caucus determined raising the gross production tax, or severance tax, from 2 to 5 percent would generate an estimated $312 million in state revenue.
“For decades, the state of Oklahoma had a stable tax rate on gross production by taxing wells at 7 percent,” Vinita Rep. Chuck Hoskin told members of the press. “In recent years, the legislature has created more and more tiers and incentives for oil and gas production, including historically low tax rates when a well is at its most productive [time]. … While we understand and agree that oil and gas [industry] is very important to our state’s economy, investing in our children and our infrastructure is mutually beneficial.”
While this isn’t the first proposal floated to increase state’s tax rates on oil and gas production, the idea has found some support among some small oil and natural gas producers and a former state Republican chairman.
Read more: http://okgazette.com/2017/04/21/some-oklahoma-lawmakers-and-business-leaders-are-calling-for-increased-gross-production-taxes/
