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And oil and gas drilling operation in the Piceance Basin in Colorado. (Image: EnergyTomorrow via Flickr)

Colorado bracing to repay millions in energy taxes

DENVER (AP) — Colorado will have to cough up hundreds of millions in tax refunds to energy companies over the next couple years.

And state lawmakers have until Wednesday to figure out how to pay the tab.

A bill moving through the Legislature calls for an estimated $115 million in refunds to oil and gas companies. The money will be refunded to energy companies denied certain tax deductions in recent years.

The payments come after the Colorado Supreme Court ruled last month that Colorado improperly calculated deductions to severance taxes paid by oil and gas companies.

The decision will likely reduce severance tax payments to local governments affected by drilling. Severance taxes are used to pay for things like repairing roads and bridges used by the industry.

Online: To read the decision, click here.

Related: Alaska lawmakers looking at oil, gas tax credit changes.

Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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