Oil companies fetching high prices for their product will likely see a reduced tax rate in North Dakota after lawmakers gave a green light to legislation backed by the powerful petroleum industry.
The Republican-led state Senate voted 36-10 on Wednesday, March 22, to pass House Bill 1286, which would abolish a requirement that oil producers pay a heftier tax rate when the commodity’s price hits high levels. The House of Representatives approved the proposal last month.
The proposal sponsored by Rep. Craig Headland, R-Montpelier, makes an exception for oil wells that touch the Mandan, Hidatsa and Arikara Nation's Fort Berthold Reservation.
Proponents of Headland's bill say cutting the oil tax trigger will encourage more investment in the Bakken oil field while creating fairness in the state's tax code. Critics say the extra tax revenue brought in when oil prices surge could fund important projects and programs.
Gov. Doug Burgum has previously indicated he would sign a bill to dispose of the so-called oil tax trigger, which he referred to as an “excess profits tax on companies that are investing greatly in our industry.”
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