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Oklahoma treasurer offers positive economic outlook

Oklahoma's economy improved in 2013, and early economic signs for 2014 appear positive, as well, Oklahoma Treasurer Ken Miller said Monday.
by Randy Ellis Published: January 7, 2014
/articleid/3921322/1/pictures/2181777">Photo - State Treasurer Ken Miller
State Treasurer Ken Miller

That law extended a reduction in the tax rate on horizontal wells from 7 percent to 1 percent for 48 months after the start of production and switched from a rebate system to a system where producers just pay lower taxes from the beginning. Under the new law, the 1 percent tax goes entirely to counties and school programs and the state receives no money from new horizontal oil and gas wells for 48 months.

Oil, gas taxes

Meanwhile, House Speaker T.W. Shannon last week announced he would introduce legislation to make the 1 percent tax on horizontal drilling permanent.

Treasurer Miller said Monday that when the current tax incentive expires in 2015, it may be time to revisit Oklahoma's whole oil and gas taxing policy.

“I think that examination may show that incremental changes in the current incentive rate, in turn, may be needed, or it could reveal that comprehensive changes in energy tax policy would better provide stability for increasing global capital,” Miller said.

“It also provides opportunity for lawmakers to simplify and unify the system by lowering the gross production tax rate on all oil and gas production rather than to continue to incentivize what has become the norm.”

The overall effective gross production tax rate in Oklahoma is currently 5.5 percent for oil and 5.3 percent for natural gas, when tax incentives and everything else is considered, he said.

One alternative would be to lower the gross production tax rate from 7 percent to the effective rate oil and gas companies are actually paying, while eliminating incentives, he indicated. That would simplify the system and provide more certainty for producers, he said.

Tax collections

These are figures for several major categories of 2013 tax collections and how they compare with collections for the previous calendar year:

• Personal income taxes, $3.528 billion, up 4.7 percent.

• Corporate tax collections, $579.62 million, down 1.6 percent.

• Sales taxes, $4.267 billion, up 2.2 percent.

• Oil and gas gross production taxes, $795.5 million, up 9.3 percent.

• Motor vehicle taxes, $723.93 million, up 3.1 percent.

• Other sources, $1.552 billion, up 2 percent.

• Total Gross revenue, $11.446 billion, up 3.2 percent.

by Randy Ellis
Investigative Reporter
For the past 30 years, staff writer Randy Ellis has exposed public corruption and government mismanagement in news articles. Ellis has investigated problems in Oklahoma's higher education institutions and wrote stories that ultimately led to two...
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