Gross Production Tax Eyed As Solution To State Budget Woes - News9.com - Oklahoma City, OK - News, Weather, Video and Sports |

NEWS

Gross Production Tax Eyed As Solution To State Budget Woes

Posted: Updated:

Oklahoma's budget writers continue to struggle with how to cover a $900-million revenue shortfall. Raising the Gross Production Tax remains on the table and is highly controversial.

Around 10 years ago, gross production tax put over a billion dollars a year into the state treasury. It's now a third of that, less than $400-million last year.

That's due, partly to the drop in commodities prices, but also to lawmakers cutting the tax rate from 7 percent to 2 percent for a well's first three years, which is when most production occurs.

Getting rid of the 2 percent incentive rate and going back to 7 percent across the board is being pushed by some as a way to help balance the budget. But many in the industry say, in the midst of a recovery would be a terrible time to raise production taxes, and besides, they already pay plenty.

“The thing that frustrates me the most, that I feel like is not being reported, is the contribution that oil and natural gas already makes to the state's coffers, we pay 25-percent of all the taxes,” said Tim Wrigley with the Oklahoma Independent Petroleum Association.

That 25 percent figure comes from a couple of studies, and is based on the combination of gross production tax, corporate tax, sales tax and personal income tax paid by oil and gas workers.

Gross production tax by itself currently accounts for just three percent of all state tax revenues.

Some of Oklahoma's long-time producers are leading the push to raise the tax to 7 percent, saying, even with that, Oklahoma's effective tax rate would be less than those in the other big producing states like Texas and North Dakota.

What's more, they say, taxes don't determine where you drill. You drill where the oil is. We'll be watching to see what happens with this.

Special Features

iPhone App

Get breaking news, weather, sports & video directly on your iPhone.

Politics

Breaking political news & the latest headlines from the state capitol & D.C.

Radars

See where weather is happening using our live interactive radars.

Technology

Spend your money wisely with reviews of new tech gadgets & the latest news in technology.

TV Schedule

Need to know what's on TV? Check out our television schedule.

Live Radar

WARN Interactive
Powered by Frankly
News 9
7401 N. Kelley Ave.
Oklahoma City, OK 73111
News9.com is proud to provide Oklahomans with timely and relevant news and information, sharing the stories, pictures and loves of Oklahomans across our great state.
All content © Copyright 2000 - 2018 KWTV. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.