| Summary: | Last year the Alaska Legislature made a controversial change in the oil production tax, the state’s largest source of oil revenue. The old tax, known as ACES (Alaska’s Clear and Equitable Share), was replaced with MAPA (More Alaska Production Act, or SB21). How much money the production tax brings in is a big issue: oil revenues pay for most state government services, and the industry accounts for roughly half of all Alaska jobs. Supporters say the new tax will stimulate North Slope oil investment, leading to more oil production—and so to higher oil revenues and new jobs. Critics say the oil industry doesn’t base investment decisions on tax structure, and that the revised tax is a give-away to the industry. They cite as evidence the $2.1 billion drop in the Alaska Department of Revenue’s forecast of expected 2014 oil revenues after the new law was passed. Alaskans face a choice between the old and the new tax structures this August, when a referendum on the primary election ballot will ask them whether to keep or repeal the new structure. This paper is intended to help Alaskans understand the two systems, which have the same tax base but differ in their tax rates, credits, and treatment of certain new production. Northrim Bank
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