A 40+ page bill filed in the Alaska Senate is designed to close a loophole that Hilcorp has been able to take advantage of due to its corporate structure was filed today by Senate Rules.
SB 0114 is an act “establishing an income tax on certain entities producing or transporting oil or gas in the state; relating to the oil and gas production tax,” and has been referred only to the Senate Finance Committee, which means it is on the fast track.
The Alaska State budget is suffering from a shortfall in revenues due to the price of Alaska crude oil being lower than was anticipated by last year’s forecast.
The bill says that any entity that has a qualified taxable income of over $4 million in a tax year shall pay a tax of 9.4% of the qualified taxable income over that $4 million amount. There area number of other provisions in the lengthy bill, but it’s clear from the bill that it is targeting Hilcorp, which is an LLC corporation and thus is not covered by some of Alaska’s oil tax structure.
Hilcorp took over the running of Alaska’s major oil fields as BP Alaska exited the state. This story will be updated.
