Earlier this week the North Dakota House rejected HB1198, which would have ended certain tax exemptions for the oil industry, but offset those tax increases with a reduction in the oil extraction rate. Unfortunately, that failed, so the bill came back to the House today just the tax increases and not the rate reductions.
Rep. Carlson spoke in favor of the bill, and made a surprising comment. He said an executive from Marathon Oil called him and said to “go ahead and raise my taxes.”
“We’d like the good faith of North Dakotans,” Carlson quoted the executive as saying. “I’ve never had someone call me to raise their taxes before.”
The bill ultimately raises taxes on the oil industry by about $70 – $80 million per biennium. To put that into perspective, the oil extraction tax has produced about $136.5 million so far in the current biennium according to the latest OMB numbers.
So this is very substantial increase in taxes, at a time when the state hardly needs the revenue. But, the “no tax cuts for big oil” mantra won out.
Senate will be voting shortly. Hard to see this failing.
Update: As expected, the bill passed the Senate easily on a 42 – 2 vote with little debate.