Certain North Dakota oil wells qualify for a 2% tax

Eligible oil production is taxed at 2% of the oil’s value at the well. The well must be drilled and completed outside the Bakken and Three Forks rock formations. The rate covers the first 300,000 barrels produced during the first 36 months after well completion. Wells within reservation boundaries, on trust property outside reservations, or classified as straddle wells on reservation trust land qualify only if the tribe opts in. The tribe must notify the tax commissioner in writing. Its choice cannot be withdrawn. The provision applies to taxable production beginning after June 30, 2025. A tribe’s opt-in takes effect in the production month after the tax commissioner receives notice.

Legislative Management, the legislature’s study body, must consider studying the oil extraction tax exemption for stripper wells. The possible study covers the tax exemption for individual stripper wells and stripper-well properties. A study is not guaranteed. Any study must examine the number of covered wells, the amount of covered production, effects on tax revenue, and other tax options. The study may include input from state tax and mineral-resource officials and oil and gas industry representatives. Lawmakers must consider the study during the 2025–26 period between sessions. Legislative Management must report findings, recommendations, and any legislation needed to carry them out to the seventieth Legislative Assembly.