Clean and Open Process Results in Near Doubling of Tax
November 12, 2007
"I was pleased to see that the work done on the bill was done in a very clean, very open and transparent process," said Rep. John Harris, R-Valdez. "I believe the Governor is getting nearly everything she asked for, and in some areas more than she asked for."
"However, there are a number of the members of the House who are concerned that by raising the tax rates and reducing the available deductions and credits, we could cause the industry to not invest in Alaska. We will need billions of dollars in investment in the future to keep the Trans Alaska Pipeline flowing. There could be very serious unintended consequences to this bill."
With an increase in the base PPT rate from 22.5 percent to 25 percent of net profits, plus an aggressive surcharge of .4 percent per dollar whenever the price rises higher than $30 dollars per barrel, the HB 2001 changes would generate about $4 billion (at $80 per barrel). The current PPT rate and surcharge generate about $2 billion annually.
The main features of the bill as it emerged from the House are:
House Bill 2001 now goes on to the Senate for its consideration. The Legislature has until the special session ends on Friday, November 16 at midnight to finish work on the bill.
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