OKLAHOMA CITY – One in six Oklahomans is supported by the energy sector.
So, many are watching the state capitol anxiously to see whether or not the legislature is going to increase taxes on oil and gas producers next legislative session.
The industry is gearing up for a fight.
They have heard some Oklahomans’ cries for higher taxes on the production of oil and gas, and they are coming to the table to suggest taxes stay put.
Meanwhile, some Oklahoma lawmakers said the industry isn’t doing enough to support revenue-raising measures to get Oklahoma back on track.
Monday, analysts detailed an industry-funded report shedding new light on the tax climate in which oil and gas producers operate.
When it comes to state-by-state comparisons, it’s complicated.
Tax structure varies so widely from one state to the next.
The newly-released report aims to compare 16 oil-producing states, including Oklahoma.
The research firm RegionTrack authored the study on oil and gas taxes in Oklahoma.
Oklahoma politicians have referenced the state’s low gross production tax (GPT) rate.
It is no surprise industry analysts said not so fast.
“We are not a low tax state. In fact, we are up toward the higher end. And, raising several taxes more makes us into the non-competitive end. The area where you would consider us to be an extremely high tax state,” said RegionTrack President Mark Sneed.
Oklahoma oil and gas producers have had historically low GPT for years.
However, energy economists now said GPT is only one of four areas of tax revenue paid by energy producers including GOT, sales tax, income tax from energy workers and ad valorem taxes.
Sneed said, if you look at them all, Oklahoma is actually near the top.
“The reality is we’re getting really good at finding oil and natural gas in a lot of places around this country. Oklahoma is a good place to do business, lets be clear. But, we have to remain competitive,” said Oklahoma Oil and Gas Association President Chad Warrington.
The Oil and Gas Association supports 4 percent GPT. They are against a hike up to 7 percent.
“I think this is one of the most transparent admissions from the pro step up group to date of people who are like this is what we’re willing to give up because we know the public opinion is quickly turning in favor of a higher gross production tax,” said Democrat Forrest Bennett.
Bennett pushed for higher taxes on oil and gas production last session. He is not letting up on that.
“These folks spent tens of thousands of dollars to promote a study to show they’re being treated unfairly. The people in my district who live in the poorest zip codes don’t have the funds to put together a study to show how unfairly they’ve been treated,” Bennett said.
The study was funded by the oil and gas industry.