Alaska Taxation of Municipal Gas Affirmed by State High Court

The gas Anchorage, Alaska, produces for its own use is taxable production for purposes of oil and gas credit calculation, the state high court ruled Friday.

Under Alaska law, municipalities pay production taxes on oil and gas sold to other entities but not on production for their own use. The Alaska Supreme Court here unanimously affirmed that municipalities can’t also exclude costs for producing their own-use gas from tax credit calculations.

The formula for calculating oil and gas tax credits “entails subtracting certain production costs from the amount of taxable gas produced.” Because municipalities don’t pay taxes on gas, Anchorage ...