Oklahoma 1994 Senate Bill 841 and 1995 Senate Bill 495 provide for a gross production tax refund for horizontally drilled wells. The refund is 6/7ths of the gross production tax paid during the qualifying time. Refunds can be obtained for 24 months or until project payback for wells that began producing prior to July 1, 2002. For wells with production began after July 1, 2002 but prior to July 1, 2011, the term runs from beginning date until project payback is achieved, but not to exceed 48 months starting with the month of initial production.
Refund claims must be filed within 18 months after the first day of the fiscal year in which the refund is first available. The price caps do not apply to this type of refund.
Petroleum Accounting Consultants Managing Member, Sean M. Hugo, CPA, discusses horizontal well gross production tax refunds.
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