Average Crude Oil Price Triggers Increased Extraction Tax Rate
North Dakota has two types of oil taxes--a production tax and an extraction tax; both taxes are five percent. However, North Dakota Century Code establishes a “trigger” provision which increases the extraction tax percentage from 5% to 6% once the average price of crude oil exceeds the established trigger price for three consecutive months.
The trigger price for calendar year 2022 is $94.69 as calculated by the Office of the State Tax Commissioner. The average price of crude oil exceeded that trigger price for the three-month period of March – May 2022. Based on those prices, the 1% additional extraction tax took effect on June 1, 2022. The additional 1% tax will remain in effect until the average price of crude oil is less than the trigger price for a consecutive three-month period.
Click here for a printable version of the revenues compared to the legislative forecast.
Click here for a printable version of the revenues compared to the previous biennium.
Comments or questions? Contact Joe Morrissette, Office of Management and Budget Director.