Posted: Feb 14, 2013 11:12 AM by Marnee Banks - MTN News
HELENA - State Senator Christine Kauffman (D-Helena) said on Wednesday that she will propose a bill aimed at requiring oil and gas companies to pay higher taxes.
For the first 12 to 18 months that an oil or gas well is operating, its production tax rate in Montana is less than 1% and after the "tax holiday," the state begins collecting 9% more.
Kauffman says the state should not be giving these oil companies tax breaks, and her bill would repeal the holiday and use half the tax money to fix roads and water and sewer systems.
The other half of the money would be placed in a trust to address long term impacts of oil and gas development.
"Our communities in eastern Montana are hurting, while corporations that are causing the trouble are going on holiday. They are making a killing out there at the expense of our communities," Kaufman said.
Oil and gas companies say the tax holiday serves as an incentive and if the tax rate increases they would pack up and drill in other states.
They also argue the lower tax rate allows them to recoup their drilling costs which can total up to $10 million per well.