Oil & Gas Production Tax


Oil & Gas Production Tax News

Comments Received on Department’s Discussion Draft Dated November 18, 2017
Post-filing Notice – Oil & Gas Property Tax – Depreciation MethodologyRegulation
Filed Regulations – Oil & Gas Production “Packet 1” – HB 111Regulation
Filed Regulations – Oil & Gas Property Tax – Depreciation MethodologyRegulation
Post-filing Notice – Oil & Gas Production Tax – Packet 1Regulation
Instructions for the Tax Division’s “Interested Parties” List Server
Comment Period Extended for Discussion Draft on Carried-Forward Annual Losses Dated November 18, 2017Regulation
Department’s Response to Question on Discussion Draft Dated November 18, 2017
Discussion Draft Carried-Forward Annual LossesRegulation
Close of Comment Period for Discussion Draft on Carried-Forward Annual LossesRegulation
Written Comments Received HB 111 Proposed Regulations Packet 1Regulation
Certified Transcript Public Hearing October 17, 2017Regulation
Public Notice – Proposed RegulationsRegulation
Proposed RegulationsRegulation
Additional Notice InformationRegulation


The State of Alaska imposes a production tax, under AS 43.55, on oil and gas produced in the state. The current tax rate of 35% was set in 2013 by Senate Bill 21 (commonly known as the More Alaska Production Act or “MAPA”). The tax is based on the net value of oil and gas, which is the value at the point of production, less all qualified lease expenditures. Qualified lease expenditures include certain qualified capital and operating expenditures.

Tax rates for oil and gas produced from the Cook Inlet are effectively capped at the rate that was imposed on oil and gas produced from each lease or property during the period April 1, 2005 through March 31, 2006. Cook Inlet Gas Prevailing Value is calculated quarterly by the Division and is currently posted on our website (1994 – present).

The oil and gas production tax provides for various credit programs:

AS 43.55.019>Oil or gas producer education credit
AS 43.55.023(a)Qualified capital expenditure credit
AS 43.55.023(b)Carried-forward annual loss credit
AS 43.55.023(l)Well Lease Expenditures credit
AS 43.55.023(d)Transferable tax credit certificate
AS 43.55.023(i)Transitional investment expenditure credit
AS 43.55.024(a)New area development credit
AS 43.55.024(c)Small producer credit
AS 43.55.024(i)-(j)Per-taxable-barrel credit
AS 43.55.025(a)(1)-(4)Alternative Tax Credit for Exploration
AS 43.55.025(a)(5)Cook Inlet jack-up rig credit
AS 43.55.025(a)(6)-(7)Frontier basin credits
AS 43.55.028Cash purchases of tax credit certificates


Under AS 43.55.201, the State collects a 1 cent per barrel conservation surcharge on taxable oil produced if there is less than $50 million in the Hazardous Release Fund. The State also collects an additional 4 cents per barrel conservation surcharge under AS 43.55.300. Additional information on the Oil Conservation Surcharge can be found here.

More information about the oil and gas production tax may be found in the here.

History of Alaska’s Oil and Gas Production Tax:


Senate Bill 21, aka the More Alaska Production Act (MAPA), was signed by Governor Sean Parnell on May 21, 2013.

Senate Bill 236, House Bill 280, and Senate Bill 309 signed in 2010, by Governor Sean Parnell, created new tax credits and amended some provisions of the tax.

House Bill 2001, aka Alaska’s Clear and Equitable Share (ACES), was signed by Governor Sarah Palin on December 20, 2007.

House Bill 3001, aka Petroleum Production Tax (PPT), signed by Governor Frank Murkowski on August 19, 2006.

Production tax system using the Economic Limit Factor (ELF) was in place from 1977- April 2006.



How to Contact Us
Email
dor.tax.production@alaska.gov

OR

Oil and Gas Production Tax Audit
Destin M Greeley
907-269-6642 - Anchorage

Oil and Gas Production Tax Credits
Destin M Greeley
907-269-6642 - Anchorage
 





Technical Questions
Destin M Greeley
907-269-6642 - Anchorage