Locator: 51018B.
The Dakota Access Pipeline (DAPL) generates a massive share of North Dakota's oil tax revenue, which funds the state's Legacy Fund. Since the pipeline became operational, the Legacy Fund has grown by more than $10 billion and recently surpassed $14 billion in total valuation.
Fund Overview and Impact
- Inflows: By constitutional mandate, 30% of the state's oil and gas gross production and extraction taxes are deposited directly into the fund. A massive driver of this revenue has been the steady, high-volume throughput of DAPL.
- Distributions: The North Dakota Legislature frequently transfers portions of the fund's earnings to the state's General Fund to pay down state bonds, fund highway infrastructure, and support tax reductions.
- State Investment: North Dakota has set aside approximately $1.3 billion for in-state infrastructure and investment programs, making it the second-largest state-level in-state investment program in the nation.
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Taxes
How North Dakota Could Overtake Texas And Florida As The Most Tax-Friendly State
By Amanda Macias
Fox News
Published June 18, 2026 7:00am EDT
Severance taxes on oil and gas production account for 41% of total tax revenue, keeping income tax burdens low.
When Americans think of low-tax policies, states like Florida and Texas usually come to mind. But another Republican-led state has quietly joined the club: North Dakota.
Tax cuts, strong finances and billions in oil revenue have combined to create one of the nation's most competitive tax environments in the Great Plains state while other states across the country grapple with budget shortfalls and debates over tax hikes. The issue is likely to remain front and center for governors and state lawmakers as they look to attract residents, businesses and investment in the years ahead.
While most states do not sit atop one of the nation's largest oil formations, tax experts say the broader lesson is applicable almost anywhere. Strong revenues can be used to lower tax burdens and strengthen state finances rather than fuel spending increases.
While North Dakota ranks second in tax collections per capita, it remains one of the country's more tax-friendly states — a welcome contradiction for the state's government and residents.
Unlike New York and California, blue states that heavily rely on income taxes to fund government operations, North Dakota generates billions of dollars from oil and gas production. That energy wealth has given lawmakers greater flexibility to cut taxes for its residents while maintaining healthy state revenues.
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A Music Documentary
Must watch. Kathy Marshall. Huntington Beach. Dick Dale. And the Del Tones. Eddie and the Showmen. The South Bay. Palos Verdes.
