A Citizen’s Guide

Gov. Sarah Palin’s tax plan, Alaska’s Clear and Equitable Share, keeps the basic structure of the current Petroleum Production Tax but changes the tax rate, limits tax deductions, and modifies investment credits. ACES also changes how the tax is administered.

Higher taxes

• Increases the tax rate from 22.5 to 25 percent of net oil company profits

• Substitutes a 10 percent gross tax on big, old fields when the price of oil drops below $40 a barrel

• Decreases the rate at which taxes increase with high oil prices, but lowers the trigger for increasing the tax rate

• Eliminates “clawback” credits for investments made in previous years

• Eliminates deductions and credits for certain expenses, including those caused by improper maintenance

• Increases the number and type of wells qualifying for credits, but requires companies to collect each year’s credits over two years

More information

• Requires oil companies to provide more information to the state

• Allows the Departments of Natural Resources and Revenue to share certain confidential industry information between the two agencies

• Exempts oil and gas auditors from the state pay scale