Tax News

CCH (cch.taxgroup.com) reports:

The Alaska Legislature passed a comprehensive revision of the petroleum profits tax (PPT) on November 16, the final day of the special legislative session called by Governor Sarah Palin. The legislation, proposed by the Palin administration and called Alaska's Clear and Equitable Share (ACES), increases the rate of tax from 22.5% to 25% of the net value of oil. In addition, the bill applies a 0.4% charge for each dollar the price of oil rises above $52 per barrel.
Governor Palin said in a statement outlining the tax changes that ACES (1) allows for tax credits to encourage new development and reinvestment in existing infrastructure, (2) restricts capital expense deductions to scheduled maintenance, and (3) implements strong audit and information-sharing provisions. The governor noted that the legislation was developed following an evaluation of the PPT by the Department of Revenue, which showed the state is expected to receive $800 million less for the next fiscal year than originally projected when the PPT was enacted in 2006. As of November 16, the legislation was awaiting transmittal to the governor for her signature.
H.B. 2001, as passed by the Alaska Legislature, November 16, 2007; News Release, Governor Sarah Palin, November 16, 2007.