(AK) Tim Bradner: State grapples with tax law reform
http://www.adn.com/2014/03/22/3388651/tim-bradner-state-grapples-with.html
Tim Bradner: State grapples with tax law reform
By Lynne Curry
THE WORKPLACE
March 22, 2014 Updated 6 hours ago
Are we going a little overboard offering tax credits? We have state tax credits for film production, fisheries investment, oil and gas exploration and a lot of other things. These cost the state treasury - the credits are dollar-for-dollar against state tax liability. Some legislators think it's time to step back and take a fresh look at them. That's always a good idea.
Right now the film tax credit is in the bull's-eye for Rep. Bill Stoltze, R-Chugiak, who co-chairs the House Finance Committee. Stoltze wants to repeal it, arguing the costs exceed the benefits. The program's defenders argue it's still new and deserves a chance to nurture a new industry.
The same pro and con applies to our oil exploration and production tax credits. I'm a little cool to the state paying two-thirds of the cost of an exploration well in tax credits and even cash, which we do. However, this could be worse: Until we passed Senate Bill 21 last year, we would also pay 20 percent of capital development costs in the event of a discovery.
In defense of the exploration credits, they did help get new natural gas discoveries in Cook Inlet, which are needed, and they can be credited with helping at least one small new oil discovery on the North Slope.