Understanding Alaska Policy Paper

The Alaska legislature is currently considering a major change to the state system of taxation for oil and gas. The proposed new tax system would replace a tax on gross wellhead production value of oil and a tax on gross wellhead value of gas with a single tax on net income earned at the wellhead. This article attempts to put the decision in context. It discusses some of the major issues related to oil taxes, summarizes the historical pattern of state petroleum revenues, and considers the consequences of the major features of the current tax proposals.Understanding Alaska (UA) is a special series of ISER research studies examining Alaska economic development issues. The studies are funded by the University of Alaska Foundation