Letter: Oil and gas tax holiday makes no sense – Billings Gazette, Feb. 17, 2013

February 18, 2013

Categories: Clean Energy, Clean Water, Climate change, Legislature, Letters, Member news, Oil and gas


Oil and gas wells are being drilled in Montana. Our standard taxation rates on producing wells are below those found in neighboring oil-producing states: Wyoming, 15.9 percent; North Dakota, 10.6 percent. Montana’s standard rate, 7.6 percent.

What sense does it make for Montana to continue its oil-and-gas “tax holiday” — on the books now for several years — which taxes production at less than 1 percent for the first 12-18 months of production? It makes no sense. The greatest population impact arrives in the first 12 to 18 months of drilling. Currently, due to the “tax holiday,” the drilling companies enjoy approximately an 8 percent tax break.

Our Legislature should support our counties, schools and cities by repealing this unnecessary subsidy to the oil-and-gas industry. The reason is simple. New production brings new people to the oil and gas fields. They and their children need not only housing but also the substantial tax-supported infrastructure and services that accompany rapid expansion. Examples include: new streets, water and sewer systems; maintenance for existing infrastructure; additional school space and new teachers; more law enforcement, fire protection and emergency medical services.

They will drill anyway, tax holiday or not, if the resource is present. Our communities, however, need the standard tax revenue to meet the new loads. Between 2008 and 2012, the tax holiday cost state, county and local governments a total of $225 million.

Demand that your legislators repeal the oil and gas tax holiday.

Bob Adams


220 South 27th Street, Suite A
Billings, Montana 59101
(406) 248-1154