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ND lawmakers mull oil tax revamp as hedge against low prices

BISMARCK, N.D. — The North Dakota Legislature is looking at restructuring oil taxes as a hedge against falling crude prices.

Oil companies could see a big tax cut if crude prices continue to slide, and the state could lose billions of dollars. A state law forgives a 6.5 percent extraction tax if the five-month average price of a barrel of oil slips below a “trigger” price. That trigger is expected to kick in June 1.

Leaders from the Republican-led House and Senate are now considering lowering the extraction tax permanently from 6.5 percent to 4 percent if the trigger kicks in, instead of giving companies the tax break.

Senate Majority Leader Rich Wardner says it would give the state more “stability and predictability.”

In related news, ND Senate approves changes to oil tax distribution formula.

This article was from The Associated Press and was legally licensed through the NewsCred publisher network.