Republican senators warn rapid shift to gross oil tax, S‑corp changes risk stalling projects

Sen. Robert Myers and other Republican senators told reporters they are open to simplifying Alaska’s oil tax code in principle but said the recent amendment to move toward a gross tax was advanced too quickly and at too high a rate.

Myers said the combined numbers in committee amount to roughly 30% on gross revenue when measured together with royalty provisions and called the immediate increase “way too much of an overreach.” “The number is way too high,” he said, adding that committee deliberations on the change have been too brief and that the fiscal and production impacts need modeling before enactment.

He also raised concerns about adding corporate income taxes to S corporations operating in oil and gas, naming four S‑corporation producers he said would be affected: Hex, Bluecrest, Hillcorp and Glenfarn. Myers warned that applying those taxes could push marginal fields out of production or toward imports over time.

Sen. Rauscher echoed the need for careful modeling and warned swift, large tax changes could reduce investment and the production needed to meet projected outputs. “If you start undercutting the money that you need for capital upfront…you shot yourself in the foot,” he said.

Sen. Rubio said Alaska’s tax code needs simplification but urged caution that taxes not harm producers using current structures, noting the code predated the emergence of many S corporations in production.

What’s next: senators said the resources and finance committees should conduct more detailed hearings and modeling before any large structural changes to oil and gas taxation are enacted.