Democratic Rep. Mary Ann Dunwell says the holiday tax incentive for oil and gas companies is a tax fairness issue at a committee hearing for House Bill 215, Thursday, January 19. Dunwell is the sponsor of the bill that would raise the tax for new wells from half a percent of gas production to 4.5 percent.
Lawmakers in Helena are considering a bill that would infuse money back into the state's main revenue fund by increasing taxes on new oil and gas wells.
House Bill 215 would remove what is called a "holiday tax," which is a tax incentive for oil and gas companies during the first year of production on a well.
The current tax for new wells is half a percent of gas production. The bill, sponsored by Democratic Rep. Mary Ann Dunwell, would increase that to 4.5 percent.
"I consider this low-hanging fruit," Dunwell said.
The bill's text estimates the measure will bring more than $630,000 into the state's general fund over the next four years.
Montana Petroleum Association lobbyist Jessica Sena spoke against the bill.
"Certainly prices may increase. We may be able to attract new investment back into Montana, but I would say that that's a gamble to bet any increase on your general fund monies on these hypothetical situations," Sena said.
Freddy Monares is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association and the Greater Montana Foundation.
Story and photo courtesy of The Bozeman Daily Chronicle
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