Oil production taxation
Christine Kaufmann, Montana State Senator, 825 Breckenridge - 05/15/08
With gasoline approaching $3.50 a gallon, and Exxon-Mobil raking in over $40 billion in profits in 2007, it's time for Montanans pay attention to how we tax oil production.
It is generally taxed at 9.26 percent, with various loopholes resulting from years of big oil lobbying at the legislature. One exemption, known as the "Oil Tax Holiday," is particularly outrageous. The first 12 or 18 months of production is taxed at 0.76 percent. That's right, less than 1 percent. It was implemented when prices were down around $10/barrel, to encourage new production. The price is now over $125/barrel.
So big oil companies are paying next to nothing on new wells being drilled to take advantage of the high prices. Wouldn't you like a "holiday" when you have to spend $50 for a tank of gas?
During the last session I proposed legislation to end the oil tax holiday. Leadership suggested I pull the bill because it had no chance. Sorry. Predictably, the big oil lobby killed it quickly.
If elected by the voters, I will introduce this bill again. Perhaps the people are fed up enough with big oil profiteering that we might be able to pass it.
With gasoline approaching $3.50 a gallon, and Exxon-Mobil raking in over $40 billion in profits in 2007, it's time for Montanans pay attention to how we tax oil production.
It is generally taxed at 9.26 percent, with various loopholes resulting from years of big oil lobbying at the legislature. One exemption, known as the "Oil Tax Holiday," is particularly outrageous. The first 12 or 18 months of production is taxed at 0.76 percent. That's right, less than 1 percent. It was implemented when prices were down around $10/barrel, to encourage new production. The price is now over $125/barrel.
So big oil companies are paying next to nothing on new wells being drilled to take advantage of the high prices. Wouldn't you like a "holiday" when you have to spend $50 for a tank of gas?
During the last session I proposed legislation to end the oil tax holiday. Leadership suggested I pull the bill because it had no chance. Sorry. Predictably, the big oil lobby killed it quickly.
If elected by the voters, I will introduce this bill again. Perhaps the people are fed up enough with big oil profiteering that we might be able to pass it.
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purple wrote on May 15, 2008 2:08 AM:
Sure you will get your pound of flesh from that evil big oil, but if you believe they will just sit there and not raise their prices to offset the loss in revenue you are more neive than you look.
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