Smaller companies testify on Parnell's tax plan

Published on NewsOK Modified: February 18, 2013 at 8:30 pm •  Published: February 18, 2013
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Bill Armstrong, president of Armstrong Oil and Gas Inc., said he is a "big supporter" of Parnell's plan but it needs to be tweaked to make it better. For example, he said the credits for qualified capital expenditures should be given more time and that the tax break for new oil could be greater.

"I think you need to make it so freakin' stinkin' competitive that it's better than any other place," he said of the tax structure, in his testimony before House Resources.

He said his company is the most active exploration company on the North Slope. Armstrong said if the current tax structure were in place when the company first started working in Alaska over a decade ago, it would not be working in Alaska.

But he cautioned lawmakers against thinking that addressing oil taxes would be a "silver bullet." He said regulatory and permitting issues also need to be improved.

J. Patrick Foley, incoming president of Pioneer Natural Resources Alaska, said the governor's plan would be a disadvantage to smaller, new projects and would not simplify tax calculations.

Kara Moriarty, executive director of the Alaska Oil and Gas Association, repeated her contention that the bill provides a cornerstone for significant tax reform.

She reiterated concerns she had raised before, including with how the bill addresses credits. But she also said there were issues not addressed by the bill, including the six-year window that revenue has to audit companies' tax returns and the minimum 11 percent interest rate that companies must pay for short payments.

The combination of the two is harmful, Moriarty said, and she recommended either shortening the audit period, eliminating the minimum rate, or doing both.

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The bill is HB72 on the House side, SB21 on the Senate side.

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Follow Becky Bohrer at http://twitter.com/beckybohrerap .