Speaker wants one percent tax to ensure energy industry thrives.
Speaker T.W. Shannon has announced he will introduce legislation to make permanent the one percent tax on horizontal drilling, ensuring the energy industry continues to thrive in Oklahoma.
"Some have suggested we should raise this tax or allow it to expire in order to bring more money in to the general fund and grow government," said Speaker Shannon. "But I don't believe in the tax more, spend more approach. The current tax rate on horizontal drilling has been doing exactly what it was designed to do: encourage more drilling in Oklahoma. Therefore, I believe we should make this rate permanent and send the message that Oklahoma is a place that welcomes the oil and gas industry, along with the jobs and economic development they bring to our great state."
Speaker Shannon said he will put forth legislation this session that will make permanent the one percent tax on horizontal wells. Currently, energy companies pay this rate due to a tax incentive that will sunset in 2015. If allowed to sunset, horizontal drilling tax rates would rise to 7 percent. Such an increase could threaten the energy industry in Oklahoma and have a severe impact on the state economy and job market, as well as discourage future investment.
“Oklahoma has one of the lowest unemployment rates in the country and the job market is booming,” said Speaker Shannon, R-Lawton. “And it's not just about what the incentive does for Oklahoma. Encouraging more domestic drilling decreases our dependence on foreign energy sources and enhances America's energy security. We can attribute all of these benefits to the pro-business environment the legislature has created and the impact of the energy industry on our great state. Now is not the time to turn our backs on those who have helped make Oklahoma a leader in this industry. Energy is an essential part to our economy and we must ensure that our message is clear. Keep drilling. Oklahoma is open for business.”
The Second Regular Session of the 54th Legislature begins February 3, 2014.