Late July 15th, the legislature passed a landmark bipartisan reform eliminating cashable oil and gas tax credits. The compromise legislation ends Alaska’s cash for tax credits system and strengthens the four percent minimum tax and was passed with broad support.
Another major provision in the compromise deal is that losses incurred by an oil company on a potential oil field that never produces cannot be carried over to write off against the taxes owed on a field that does end up producing oil. This structural reform is called “ring-fencing.”
However, the work of reforming Alaska’s oil tax structure is not over. Another provision of the bill establishes a House-Senate working group that will convene between now and January, 2018 to look into further changes to how Alaskan’s receive value for their petroleum resources.
With the passage of the compromise version of HB 111, both the House and Senate adjourned the 2nd Special Session.