Republicans Draft Bill to Change Oil Tax Structure

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Republicans Draft Bill to Change Oil Tax Structure

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By Tom Gerhardt, News Director - email

Republican lawmakers introduce a bill that would dramatically change the oil tax structure in North Dakota.

Senator Dwight Cook's proposal would make four major changes.

The biggest impacts would be felt on new stripper wells, incentives to drill outside the Bakken and Three Forks and at a lower flat rate extraction tax.

House majority leader Al Carlson says both oil companies and the state of North Dakota would be giving some to create more stability in the oil industry.

"This is a good long range plan. I think the industry gave up a good deal to get this. We think that's it's good for them and it's good for the state of North Dakota. The naysayers will say here you are cutting a big break for the industry. I don't think it's a big break it has a positive fiscal note," says republican house majority leader Al Carlson.

Cook says the overall tax rate on oil companies would fall to 9.5 percent in January or 2017. Right now it is 11.5 %.

He says the lower tax rate would eliminate triggers in oil prices that if met would dramatically reduce revenue for the state of North Dakota.

Oil companies would also be given incentives to drill outside the Bakken and Three Forks areas.

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