Industry report: measure would hike oil, gas taxes
DENVER ” An industry-funded report says that Colorado’s oil and gas industry would be among the most heavily taxed nationwide if voters approve a proposal to eliminate a property tax credit.
The report commissioned by the Colorado Petroleum Association and released Monday said Colorado’s taxes on the industry would be second only to Wyoming’s among the country’s major energy-producing states if voters approve the proposal.
“We think it’s incumbent for the association to communicate what impact the tax increase would have on companies doing business in Colorado,” said Stan Dempsey, president of the Colorado Petroleum Association.
The proposed initiative, backed by Gov. Bill Ritter, would ask voters in November to end a deduction that allows companies to take a credit of up to 87.5 percent of the prior year’s property tax liability from their severance taxes.
Ritter has said the measure would generate more than $200 million a year.
New revenues would go to college scholarships, wildlife habitat protection, clean energy and community expenses associated with expanded drilling.
The proposal’s supporters say that Colorado’s severance taxes are among the lowest of most energy-producing states. Severance taxes are imposed on oil, gas, coal and other nonrenewable resources.
Dempsey said the study by California-based LECG shows that raising taxes on oil and gas companies will result in higher costs for consumers.
“Any time costs are up for any type of business, the effective higher price will be passed on to consumers,” Dempsey said.
He didn’t say how much prices would rise and neither did the study.
The oil and gas industry is raising millions of dollars for its campaign against the initiative.
A report released last week by the Sonoran Institute, an Arizona-based conservation group, said ending the tax break for oil and gas companies would have little effect on gasoline prices and home heating bills.
The report by economist Joe Marlow says factors driving energy prices are global, not local.
“Since oil and gas companies continue to enjoy record profits, there is no economic reason why they can or should target price increases to Colorado consumers,” said Mark Cooper of the Consumer Federation of America.
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