"I’m concerned this will prove to be yet another major disincentive on an industry that’s still reeling from last month’s ELF tax increase."
- Rep. Kohring
(JUNEAU) – The Chairman of the Legislature’s Oil & Gas Committee, Rep. Vic Kohring (R-Wasilla/Mat-Su), expressed concern with SB 151, read across the Senate Floor today. The bill removes the federal tax deduction from the Alaska Net Income Tax Act for certain oil production activities in Alaska.
"This will increase tax liabilities of oil companies because it removes an important deduction, so it basically amounts to yet another tax increase on the industry," said Kohring. Kohring also opposed the state’s recent changes to the "ELF" provisions in state law that resulted in a major increase in the industry’s production taxes by up to $190 million. He referred to the proposed new tax as a "double hit" on oil and gas companies.
"I’m concerned this will prove to be yet another major disincentive on an industry that’s still reeling from last month’s ELF tax increase. Oil and gas development is the centerpiece of Alaska’s economy, and we’re effectively biting the hand that feeds us," added Kohring. "This legislation adds to the growing uncertainty that Alaska may not be the attractive place it once was for investment opportunities, in terms of exploration and development of our oil and gas reserves."