Tax Breaks For Oil, and Tax Increases For Frack Water Companies
Another great irony of this development is that over the last two bienniums, the legislature has gone out of its way to cut oil taxes.
Now, to fill a budget gap caused by putting government in competition with the private sector, they will now be levying a special targeted tax on the businesses providing water for the oil industry.
If the Senate passes this bill the way it is, even though it is called a "royalty" it very well could be the first Value Added Tax in North Dakota.
As a tax on an input cost (frack water) rather than a tax on the final product (produced oil).
This would not be a good direction for state fiscal policy, or for the oil industry itself.
Effort to Separate Tax and Bailout Blocked
There was an effort by a group of conservative legislators (those who did vote against the bill) to remove the water tax and the WAWS bailout from the bill by "dividing the bill".
House leadership put a stop to that effort.
Those who voted for the bill are not responsible for their leadership setting them up this way. But make no mistake, Republican House Leadership did set their own members up to be forced to vote for a tax increase.
This leadership issue is one that that House Republicans must deal with on their own. No one else can save them when leadership sets them up.
Read more about this bill below.