HB 4004 - Oil and Gas Production Tax

• Changes oil production tax from 35% to a new structure effective January 1, 2022: oil taxed at 35% under the annual production tax value method, and gas taxed at 13% of gross value at point of production.

• Suspends the 35% oil tax rate for oil produced north of 68 degrees North latitude from January 1, 2022 through January 1, 2024, requiring producers to pay only the minimum tax rate under existing price-based brackets instead.

• Establishes a transitional minimum tax rate of 6% for North Slope oil produced between January 1, 2022 and January 1, 2024, restoring price-based minimum tax rates (0-4%) beginning January 1, 2024.

• Modifies installment payment calculations to reference the applicable percentage under existing tax brackets based on monthly oil prices rather than annual calendar year prices.

• Takes effect January 1, 2022, while authorizing the Department of Revenue to adopt implementing regulations immediately.