Inactive Well Gross Production Tax Exemption

The inactive well exemption from Oklahoma gross production tax came about in 1994 from Senate Bill 841 and Sentate Bill 495 in 1995.  Provides for a refund of 6% out of the total 7% gross production tax for production from wells that have not produced oil, gas, or oil and gas for a period of not less than the 2 years prior to July 1, 1994.  For wells where production was reestablished on or after July 1, 1997 and prior to July 1, 2012, a 1 year inactivity period is required.

Qualifying wells will receive a gross production tax refund for 28 months from the date the production is reestablished.  After June 30, 2003 refunds must be filed within 18 months of the date in which they can first be filed. 

Refunds will not be allowed if weighted average price of Oklahoma oil exceeds $30/bbl. and the weighted average wellhead price of Oklahoma natural gas exceeds $5.00/MCF on an annual calendar year basis. 

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Testimonials

"It is a pleasure for me to recommend Petroleum Accounting Consultants, PLLC. They performed research of our files, preparation of data and preparation of the applications for properties that qualify for a refund of gross production taxes. The professionalism, the work ethic, with a minimum disruption of our normal work has made the tedious research necessary to apply for the refunds a reasonable project for a small firm such as ours."

Bird Oil & Gas, Inc. - Billy C. Griffin, P.E.

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Severance Taxes

An cost effective alternative to hiring your own accounting staff to complete your severance tax reporting requirements is to hire Petroleum Accounting Consultants, PLLC.

Our consultants can complete your severance tax returns and save you money on salary expense and payroll tax expense. More importantly our consultants are familiar with the various severance tax incentives offered by oil and gas producing states and can take advantage of them, which will save you money on your severance taxes.

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