Hilcorp is the only such company.Īnchorage attorney Robin Brena, who specializes in oil and gas taxes, spoke on behalf of the bill on Monday. The majority of energy used on the Railbelt comes from Cook Inlet natural gas, from Hilcorp.īut Department of Revenue spokesperson Aimee Bushnell said in an email that the bill would raise taxes on production in the North Slope, which would impact companies that work in both areas. The state years ago set permanent tax ceilings on Cook Inlet oil and gas aimed at keeping Southcentral energy prices low. The change in the production tax rate would not directly impact production in Cook Inlet. “Any change to Alaska’s tax system truly does need to be analyzed both on impacts of our state economy and North Slope, as well as the Cook Inlet,” Moriarty said at the hearing. Kara Moriarty, executive director of the Alaska Oil and Gas Association, said that’s one of the reasons her association opposes the bill. The legislation comes in a heightened moment for the state’s oil and gas industry, with warnings about shortfalls in natural gas production in Cook Inlet. “However, it could have long-term impacts, negative impacts, to the state, based on the decisions that oil companies will make as it pertains to their future investment outlook,” he said. The bill would also reduce the per-barrel break for companies by $3 per barrel of oil at certain price thresholds.Īt a Senate Finance hearing Monday, Fadil Limani with the state Department of Revenue said the legislation could have a positive short-term boost to the state’s finances, bringing in as much as an additional $1.1 billion in the next fiscal year, according to estimates from his department. Only publicly traded corporations like ConocoPhillips, Alaska Airlines and Walmart pay income tax in Alaska. It would extend income taxes to companies that are not publicly traded - like oil and gas company Hilcorp, which is Cook Inlet’s dominant oil and gas producer, and falls under the “S-Corporation” designation.Īs it stands, S-Corps do not pay income taxes to the state. Senate Bill 114 is sponsored by Anchorage Democrat Sen. The Alaska State Capitol (Riley Board/KDLL)Ī bill that would extend the state’s corporate income tax to companies like Hilcorp is making its way through the Alaska Legislature.
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