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

"I found their staff to be very knowledgeable and professional. Because of their knowledge of the rules and requirements, they were able to tell me which wells would qualify for relief. Many wells were eligible that I did not think would be according to my interpretation of the requirements.

I was very pleased with the outcome and the amount of refunds that I received. I look forward to a continuing relationship with Petroleum Accounting Consultants and I highly recommend their services."

Lewis A. Hembree Production Company
Lewis A. Hembree


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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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