ADVERTISEMENT

ADVERTISEMENT

Oil tax trigger takes effect, but impact minor

BISMARCK - Low oil prices triggered a state tax incentive to take effect Tuesday, but its impact to state revenues will be minor. The tax incentive known as the large trigger could have cost North Dakota $30 million a month or about $1 million a ...

1524185+Oil money.jpg

 

BISMARCK – Low oil prices triggered a state tax incentive to take effect Tuesday, but its impact to state revenues will be minor.

The tax incentive known as the large trigger could have cost North Dakota $30 million a month or about $1 million a day in oil tax revenues, but lawmakers last session repealed the incentive for most new oil wells, Tax Commissioner Ryan Rauschenberger has said.

Instead, the large trigger will only apply to some older and lower-producing wells and will not affect new oil production from Bakken and Three Forks wells.

The large trigger took effect Tuesday because the price of West Texas Intermediate oil averaged below $55.09 for five consecutive months.

ADVERTISEMENT

The incentive expires Dec. 31. Starting Jan. 1, the state’s oil extraction tax will be reduced from 6.5 percent to 5 percent, for an overall oil taxation rate of 10 percent.

The new law creates a “high price trigger” which boosts the tax rate to 6 percent if the price of West Texas Intermediate oil averages above $90 for three consecutive months.

What To Read Next
Having a coffee shop has been a long time dream for Stephenie Schiller, who owns the Happy Camper Coffee, a mobile coffee shop
Commercial farmers in Nebraska, the Dakotas, and Minnesota start using drones for spraying, seeding.
Artificial intelligence can now act as an artist or a writer. Does that mean AI is ready to play doctor? Many institutions, including Mayo Clinic, believe that AI is ready to become a useful tool.
The biennial award recognizes “rising stars” under 40 years old in the economic development industry