OKOGA Weighs In on House Passage of HB 1085x

The passage of HB 1085x, a revenue raising bill that passed on the floor of the Oklahoma House of Representatives on Wednesday during special session, has evoked a response from the Oklahoma Oil and Gas Association about raising the gross production tax rate on more than 6,600 legacy wells to 7 percent.

“With this bill, the Legislature will raise the effective GPT rate by 2 full percentage points since 2016 to the tune of $412 million additional tax dollars from the oil and natural gas industry,” said Chad Warmington, OKOGA President. “These GPT increases, and the constant chatter of another tax increase next year, has made Oklahoma’s business environment uncertain and unreliable. This is going to slow valuable momentum for achieving Oklahoma’s full energy recovery.”

HB 1085x will make Oklahoma’s effective GPT rate 5.3 percent, according to the Oklahoma Tax Commission. It will also provide $51 million in additional taxes in fiscal year 2018 and another $100.5 million in additional taxes in fiscal year 2019. Oklahoma’s effective GPT rate was 3.2 percent in January 2017, according to a press release issued on Wednesday.

“The growth in new jobs and new tax revenue in Oklahoma this year has been driven by the oil and natural gas industry,” said Warmington. “Industry wants to do more to grow Oklahoma’s economy, create jobs, and make long-term investments but this is at risk until the state can reestablish certainty in the cost to do business in Oklahoma.”