HARRISBURG — A bill circulating in the Illinois House of Representatives clarifying the taxation rules on purchases of oil and gas from producers has been passed out of the Revenue and Finance Committee with Rep. Natalie Phelps Finnie, D-Elizabethtown, as the bill’s only sponsor.
The legislation applies to the first purchaser of the oil or gas. Right now, the first purchaser is required to withhold the tax and pay it later to the Illinois Department of Revenue. In order to do that, the purchaser must file an exemption certificate proving the well where the oil is being purchased is exempt.
Typically, those are wells that produce less than 1,500 barrels a year, Phelps Finnie said.
Phelps Finnie said the bill is a technical change of the language that shifts the responsibly from the purchasers to the producer to pay the tax. She said the tax would be withheld at the time of purchase — similar to sales tax.
She said this will save companies time and will require less cutting through red tape when attempting to do business in the region.
“If we are serious about developing Southern Illinois, then we need to make sure the comprehensive law is workable and gives the industries the proper tools they need to help develop our areas,” Phelps Finnie said.
“While my legislation provided a technical fix, I want to help new energy companies as they come into our area and try to develop property, create new jobs and put more money in the pockets of Southern Illinoisans.”
The hope of the industry is that this legislation will help companies as they continue to look at new locations for development and potentially create employment in Southern Illinois.
“We want to thank Rep. Phelps Finnie for her work on this legislation, and helping support our industry as we try to bring new jobs to the region,” Craig R. Hedin, president of the Illinois Oil and Gas Association, said.
Read the full article by Dustin Duncan at The Southern