Gross Production Tax

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Gross Production Tax

In the United States, a tax levied by some individual states on mining and drilling companies on the value of what is mined or drilled. For example, the State of Oklahoma levies a gross production tax on oil companies equal to 7% of the value of oil drilled from the ground. Gross production taxes are generally deductible from federal taxes.
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Gross production taxes on oil and natural gas generated $80.8 million in July, an increase of $12 million, or 17.4 percent, from last July.
March gross production taxes generated $96.2 million, up by 32.2% from the prior year.
Gross production taxes increased 124.5% year over year as both price and production recorded gains and state policy action, which boosted the horizontal drilling tax rate from 1% to 4%, was incorporated.
Instead of applying a fixed tax per unit, a gross production tax levies a tax based on the "dollar value of the product extracted from the mine." (165) While different in their application, both real and gross production taxes take a set portion of the extracted resource's worth.
As a result of energy production eliminated by Alternative 3 in the Little Missouri National Grasslands, North Dakota would not collect, over 19 years, $14.2 million in oil and gas gross production taxes and $5.5 million in oil extraction taxes.
Receipts from gross production taxes on oil and natural gas for January totaled $100.1 million, the lowest monthly total since the production incentive tax rate was raised from 2 percent to 5 percent last year, McDaniel said.
Despite the large deviation, gross production taxes increased 89% year over year as both price and production recorded gains.
Every major revenue stream expanded during 2018 at rates ranging from 84 percent for gross production taxes on oil and natural gas production to 2.5 percent for motor vehicle taxes.
Gross production taxes charge drillers a portion of each barrel's value.
It would have created the Oklahoma Vision Fund, and beginning in 2020, 5 percent of gross production taxes would be deposited into the fund.
Gross production taxes on oil and natural gas generated $102.1 million in October, an increase of $50 million, or 96.2 percent, from October 2017.
The state collected $810 million in gross production taxes over 12 months ending in September 2018.