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SB112 • 2026

OIL & GAS PRODUCTION TAX

An Act relating to credits against the oil and gas production tax; and providing for an effective date.

Energy Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
SENATE RULES
Last action
2025-04-30
Official status
(S) RES
Effective date
Not listed

Plain English Breakdown

The bill explicitly states it is retroactive to January 1, 2025.

Changes to Alaska Oil and Gas Tax Credits

This bill lowers the tax credit amount oil producers can claim for each barrel of northern Alaskan oil produced starting January 1, 2025.

What This Bill Does

  • Reduces the tax credit from $8 to $5 per barrel for northern oil that does not receive a value reduction at production when prices are under $80.
  • Sets lower tax credits based on monthly average gross values: $4 if between $80 and $90, $3 if between $90 and $100, down to zero if the price is $150 or higher.
  • Limits total tax credits a producer can use in one year for a specific lease or property to the amount of qualified capital expenditures spent on that lease or property.
  • Stops producers from saving unused tax credit amounts to use in future years.
  • Makes these changes apply retroactively to oil produced starting January 1, 2025.

Who It Names or Affects

  • Oil and gas producers operating leases or properties north of 68 degrees North latitude
  • The Alaska Department of Revenue

Terms To Know

Tax credit
An amount that reduces the total tax a producer must pay to the state.
Gross value at point of production
The price or worth of oil when it is first taken out of the ground before any adjustments.
Qualified capital expenditure
Money spent by a producer on long-term improvements to their lease or property, as defined in state law.

Limits and Unknowns

  • The bill does not specify the exact effective date for when it becomes official beyond stating it takes effect immediately.
  • Producers cannot carry forward unused credits if they do not spend enough on capital improvements to match their credit amount.
  • Interest and penalties are waived only until January 1, 2026, after which producers must pay any remaining tax balance.

Bill History

  1. 2025-04-30 Text

    (S) <Bill Hearing Canceled> -- MEETING CANCELED --

  2. 2025-04-30 Text

    (S) RESOURCES at 03:30 PM BUTROVICH 205

  3. 2025-04-28 Min

    (S) Minutes (SRES)

  4. 2025-04-28 Text

    (S) <Bill Hearing Rescheduled to 04/30/25>

  5. 2025-04-28 Text

    (S) RESOURCES at 03:30 PM BUTROVICH 205

  6. 2025-04-04 Min

    (S) Minutes (SRES)

  7. 2025-04-04 Text

    (S) Heard & Held

  8. 2025-04-04 Text

    (S) RESOURCES at 03:30 PM BUTROVICH 205

  9. 2025-03-12 Min

    (S) Minutes (SRES)

  10. 2025-03-12 Text

    (S) Heard & Held

  11. 2025-03-12 Text

    (S) RESOURCES at 03:30 PM BUTROVICH 205

  12. 2025-02-26 363

    (S) REFERRED TO RESOURCES

  13. 2025-02-26 363

    (S) RES, FIN

  14. 2025-02-26 363

    (S) READ THE FIRST TIME - REFERRALS

Official Summary Text

OIL & GAS PRODUCTION TAX
An Act relating to credits against the oil and gas production tax; and providing for an effective date.

Current Bill Text

Read the full stored bill text
SB0112A -1- SB 112
New Text Underlined [DELETED TEXT BRACKETED]

34-LS0566\N

SENATE BILL NO. 112

IN THE LEGISLATURE OF THE STATE OF ALASKA

THIRTY-FOURTH LEGISLATURE - FIRST SESSION

BY THE SENATE RULES COMMITTEE

Introduced: 2/26/25
Referred: Resources, Finance

A BILL

FOR AN ACT ENTITLED

"An Act relating to credits against the oil and gas production tax; and providing for an 1
effective date." 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
* Section 1. AS 43.55.024(i) is amended to read: 4
(i) Subject to the restriction in (k) of this section, a [A] producer may apply 5
against the producer's tax liability for the calendar year unde r AS 43.55.011(e) a tax 6
credit of $5 for each barrel of oil taxable under AS 43.55.011( e) that receives a 7
reduction in the gross value at the point of production under A S 43.55.160(f) or (g) 8
and that is produced during a calendar year after December 31, 2013. A tax credit 9
authorized by this subsection may not reduce a producer's tax l iability for a calendar 10
year under AS 43.55.011(e) below zero. 11
* Sec. 2. AS 43.55.024(j) is amended to read: 12
(j) Subject to the restriction in (k) of this section, a [A] producer may apply 13
against the producer's tax liability for the calendar year unde r AS 43.55.011(e) a tax 14
34-LS0566\N
SB 112 -2- SB0112A
New Text Underlined [DELETED TEXT BRACKETED]

credit in the amount specified in this subsection for each barr el of oil taxable under 1
AS 43.55.011(e) that does not receive a reduction in the gross value at the point of 2
production under AS 43.55.160(f) or (g) and that is produced du ring a calendar year 3
after December 31, 2013, from leases or properties north of 68 degrees North latitude. 4
A tax credit under this subsection may not reduce a producer's tax liability for a 5
calendar year under AS 43.55.011(e) below the amount calculated under 6
AS 43.55.011(f). The amount of the tax credit for a barrel of t axable oil subject to this 7
subsection produced during a month of the calendar year is 8
(1) $5 [$8] for each barrel of taxable oil if the average gross value at 9
the point of production for the month is less than $80 a barrel; 10
(2) $4 [$7] for each barrel of taxable oil if the average gross value at 11
the point of production for the m onth is greater than or equal to $80 a barrel, but less 12
than $90 a barrel; 13
(3) $3 [$6] for each barrel of taxable oil if the average gross value at 14
the point of production for the m onth is greater than or equal to $90 a barrel, but less 15
than $100 a barrel; 16
(4) $2 [$5] for each barrel of taxable oil if the average gross value at 17
the point of production for the month is greater than or equal to $100 a barrel, but less 18
than $110 a barrel; 19
(5) $1 [$4] for each barrel of taxable oil if the average gross value at 20
the point of production for the m onth is greater than or equal to $110 a barrel [, BUT 21
LESS THAN $120 A BARREL; 22
(6) $3 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE 23
GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS 24
GREATER THAN OR EQUAL TO $120 A BARREL, BUT LESS THAN $130 A 25
BARREL; 26
(7) $2 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE 27
GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS 28
GREATER THAN OR EQUAL TO $130 A BARREL, BUT LESS THAN $140 A 29
BARREL; 30
(8) $1 FOR EACH BARREL OF TAXABLE OIL IF THE AVERAGE 31
34-LS0566\N
SB0112A -3- SB 112
New Text Underlined [DELETED TEXT BRACKETED]

GROSS VALUE AT THE POINT OF PRODUCTION FOR THE MONTH IS 1
GREATER THAN OR EQUAL TO $140 A BARREL, BUT LESS THAN $150 A 2
BARREL; 3
(9) ZERO IF THE AVERAGE GROSS VALUE AT THE POINT OF 4
PRODUCTION FOR THE MONTH IS GREATER THAN OR EQUAL TO $150 A 5
BARREL]. 6
* Sec. 3. AS 43.55.024 is amended by adding a new subsection to read: 7
(k) In a calendar year, for each lease or property, a producer may not apply 8
against the producer's tax liability under AS 43.55.011(e) credits earned under (i) or (j) 9
of this section in an amount that exceeds the producer's qualif ied capital expenditures 10
f o r th e le a s e o r p r o p e r ty . A p r o d u c e r may n o t ca r ry f o r wa r d a n unused credit under 11
this subsection. In this subsec tion, "qualified capital expendi ture" has the meaning 12
given in AS 43.55.023(o). 13
* Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 14
read: 15
APPLICABILITY. AS 43.55.024(i) and (j), as amended by secs. 1 a nd 2 of this Act, 16
and AS 43.55.024(k), added by sec. 3 of this Act, apply to cred its resulting from oil produced 17
on or after January 1, 2025. 18
* Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 19
read: 20
TRANSITION: PAYMENT OF TAX. Not withstanding AS 43.55.020, a per son 21
subject to an adjustment to tax liability as a result of AS 43. 55.024(i) and (j), as amended by 22
secs. 1 and 2 of this Act, and AS 43.55.024(k), added by sec. 3 of this Act, shall pay the 23
balance of the tax due befor e January 1, 2026, by January 1, 20 26. Until January 1, 2026, the 24
Department of Revenue s hall waive interest that would otherwise accrue under AS 43.05.225 25
and civil and criminal penalties accruing under AS 43.05.220, 4 3.05.245, and 43.05.290 that 26
are a result of the retroactivity of this Act. 27
* Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 28
read: 29
RETROACTIVITY OF REGULATIONS. Notwithstanding a contrary provis ion of 30
AS 44.62.240, if the Department of Re venue expressly designates in a regulation that the 31
34-LS0566\N
SB 112 -4- SB0112A
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regulation applies retroactively to a specific date, a regulati on adopted by the department to 1
implement, interpret, make specific, or otherwise carry out thi s Act applies retroactively to 2
that date. 3
* Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 4
read: 5
RETROACTIVITY. This Act is retroactive to January 1, 2025. 6
* Sec. 8. This Act takes effect immediately under AS 01.10.070(c). 7