N. Dakota may cut production taxes

[dan_s]

Now here is a state that knows how to be more attractive to businesses that create jobs. ND is also discussing the elimination of their income tax on both individuals and corporations. NG now gets some much tax revenues from sales taxes + production taxes that they don't know what to do with all this new found wealth. Remember, the states population is only 650,000. - Dan

BISMARCK, N.D. (AP) -- North Dakota's oil industry has resumed its push to coax a tax cut from the GOP-controlled state Legislature, and the House's Republican majority leader is taking the lead in the effort.

Rep. Al Carlson, R-Fargo, said the proposal would allow gradual cuts in North Dakota's 11.5 percent oil tax rate as production rises. The levy could fall to 9 percent if average production exceeds 700,000 barrels a day for three straight months.

North Dakota now pumps about 342,000 barrels a day, which is more than triple the state's production of five years ago. Carlson's proposal envisions the oil tax falling in increments of 0.5 percentage points as production targets are reached.

Should average oil output top 425,000 barrels a day for three months, the tax would drop to 11 percent. Three subsequent decreases would be granted for each increase of 75,000 barrels daily, the proposal says. The final tax break would come once oil output hit an average of 700,000 barrels. Tax cuts would be locked in once targets are reached.

The revamped tax structure would apply to all oil production, not just to newly drilled wells. It would scrap almost all of a bewildering array of tax exemptions and oil production "triggers," part of a web of incentives that the Legislature has approved during the past two decades as oil prices rose and fell.

"It reduces the tax on oil. It makes us more competitive. It allows those guys to have a plan for commitments to everything from pipelines to natural gas development to the orderly development of these cities to handle the pressure," Carlson said.

[dan_s]

A group of industry spokesmen, including Harold Hamm, chief executive officer of Continental Resources Inc., an Enid, Okla., company with broad holdings in western North Dakota, pushed the idea during a committee hearing. The panel's chairman, Sen. Dwight Cook, R-Mandan, said he was unsure when, or if, the committee would vote on the amendment.

[dan_s]

While many states are confronting severe budget shortfalls and dragging economies, North Dakota has a different sort of problem. It's stuck deciding how best to deal with a budget surplus. Yes, a surplus. North Dakota's balance sheet is so strong it recently reduced individual income taxes and property taxes by a combined $400 million, and is debating further cuts.

All because of the severance taxes, property taxes and sales taxes being generated by the development of the Bakken Shale.