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ND oil tax exemption set to start with slipping crude prices

BISMARCK, N.D. — A tax cut that will cost the state about $160,000 in lost revenue for each well drilled is slated to begin on Sunday.

The extraction tax exemption is an incentive to keep companies drilling new wells when they might otherwise go idle due to low oil prices. That trigger needs to average $55 for a month but is due to expire this summer.

North Dakota sweet crude was fetching about $45 a barrel late last week. The price was well below the trigger through most of January.

The tax incentive is one of two that gives North Dakota oil industry a big tax break when crude prices nosedive. State law also forgives a 6.5 percent extraction tax if the five-month average price of a barrel of oil slips below $52.58.

In related news, North Dakota legislators to discuss oil tax distribution.

 

This article was from The Associated Press and was legally licensed through the NewsCred publisher network.