Quick Start for:

New Crude Oil and Natural Gas Tax System
Frequently Asked Questions for Reports due on or After January 1, 2008

Training


Is there computer-based training available?
There is computer-based training available for the new forms. You can find it at the following link.
http://www.window.state.tx.us/taxinfo/CONGforms/index.html
If we need additional training, what's our recourse?

Please contact Michael Elwell, the Crude Oil & Natural Gas Tax Section Supervisor, to request a meeting with a subject matter expert. His contact information is as follows.

michael.elwell@cpa.state.tx.us
(800) 531-5441 extension 5-1506


Crude Oil and Natural Gas Original and Amended Reports


Where can I get additional report forms, supplemental pages, etc.

Natural Gas tax forms are available at http://www.window.state.tx.us/taxinfo/taxforms/11-forms.html

Crude Oil tax forms are available at http://www.window.state.tx.us/taxinfo/taxforms/10-forms.html

If my original report was filed prior to conversion to the new system (old form), should I include the new fields on my amended report?
Use the new forms but you may leave the new fields blank.
How are we notified of errors on our reports?

If you are a taxpayer who files paper returns, a letter is generated if there are errors. Included with this letter is a list of the error messages. Amendments must be filed in order to correct these errors. No credit transfers or refunds will process until these errors are corrected.

Taxpayers who file paper returns may also download report error lists from Web Inquiry.

If you are a taxpayer who files electronically, you will receive an error letter. The letter will direct you to the Web site to view the errors.

Can we make corrections using the Web Inquiry system?
No, you need to file amended reports to make your corrections.
How soon after a report processes can we see it on the Web?
The information is available immediately after we process your report.
What is a locator number?

It is the number assigned by our system for each detail item that processes to your account for each production period. All "like" items are assigned the same locator number (same lease, same secondary taxpayer number, same exemption, etc.).

The locator numbers start over for each report period. The locator number may not be the same number for the same lease in every report period.

If an amended report is filed on a lease that was previously reported, it will be assigned the same locator number as the original item.

How is the locator number used?

Using the locator number to correct information for a particular lease can simplify the amendment process, especially when filing paper amendments.

Review the instructions on the back of the amended report forms before filing corrections by locator number. Natural Gas tax forms and Crude Oil tax forms are available online.

How do we know when the system has programmatically changed our data?

If you are a taxpayer who files paper returns, a letter is generated if there are data changes. Included with this letter is a list of the data changes.

Taxpayers who file paper returns may also download the data changes from Web Inquiry.

If you are a taxpayer who files electronically, you will receive an error letter. The letter will direct you to the Web site to view the errors.

What if we disagree with the errors?
Contact your assigned examiner call the section line at (800) 531-5441, ext. 3-4455 or direct (512) 463-4455. Questions regarding errors may also be faxed to (512) 936-0009.
For natural gas reporting, the lease type doesn't change if you're reporting a legislative exemption (tax incentive)?
No, the lease type will always be a "1" for an oil lease or "2" for a gas lease. There's a separate block to report your exemption type.
When is an API number required?
API numbers are required only for well-level legislative exemptions, for example, two-year and three-year inactive well exemptions. If the API number is not included for a well-level exemption, the exemption will be disallowed and you will receive a data change letter. An amendment would be required to correct this information.
What if we don't know the check digit?

There's a link to a check digit calculator on the Web Inquiry screen under "Resources--Useful Links." The check digit is more critical for paper filers to help our data entry group ensure that the numbers are not transposed.

If there were old errors involving invalid check digits, this information was not converted into the new system. These errors are no longer valid.

The check digit is no longer required and would be unnecessary for EDI filers.

If we report a lease at the full tax rate but it qualifies for an exemption, does the system convert the lease to exempt?
No, legislative mandates require that amendments be filed by the taxpayer to recoup taxes paid on exempt leases.

Electronic Reporting and Payment


Does the update to Version 3.0 for the Comptroller's EDI software retain the data records that already existed in Version 2.7?
Data from Version 2.7 can be converted to Version 3.0.
What will cause the electronic report to fail in transmission?
High-level errors such as invalid tax identification number, invalid report period, invalid tax type or sub-type will cause a failure in transmission. The sender will be notified of the problem by e-mail.
How are we notified of errors on our reports?

After a report(s) is processed, a letter is generated notifying you of errors. The letter will direct you to the Web site where you can view errors. Errors must be corrected by an amended report.

Errors must be corrected before a credit transfer or refund will process.

What if we disagree with the errors?
Contact your accounts examiner, call the section line at (800) 531-5441, ext. 3-4455 or direct (512) 463-4455. Questions regarding errors may also be faxed to (512) 936-0009.
How do we make EDI address changes?
Contact us via Texas Tax Help.
I tried to call in my electronic payment (TexNet), but it didn't work.
The codes have changed. It will no longer accept 10020 (crude oil) or 11020 (natural gas). You must use 37020 (natural gas purchaser), 49020 (natural gas producer), 36020 (crude oil purchaser), or 48020 (crude oil producer).

Refunds, Payments and Credit Transfers


Can we get a refund for periods that are in "error" status?
A refund can be requested when a period is in error status, but all errors must be corrected to validate and process a refund.
Can we transfer credits from periods in "error" status?
A transfer will not process from a period that has errors until the errors are cleared. Ensure that errors are corrected before submitting a credit transfer form (10-141 for crude oil & 10-147 for natural gas).
On the new transfer forms, a reason code is required. There could be more than one reason code for credits in a single production period. How do we code this?

Use the reason code that applies to the highest amount of credit being transferred for that production period.

It is advisable to always separate credit amounts on the transfer form that are a result of credit amendments for marketing cost, tax reimbursement or value reduction reasons.

Do we have to include a letter for every reason code on the transfer form?

No, the only reason codes that require a letter are:

10-147 Natural Gas Transfer Form

  • Reason Code 1: Marketing Cost
  • Reason Code 3: Tax Reimbursement
  • Reason Code 5: Value Reduction

10-141 Crude Oil Transfer Form

  • Reason Code 5: Value Reduction

Refer to the back of the transfer form for instructions.

Can credit transfer be done online?
Not at this time.
Is the warrant number the same as a check number?
Yes, it can be found at the top right hand side of the check/warrant.
If the warrant shows on our payment history, can we assume it's been mailed?
Yes, but allow a few days for the mail.
Can we request refunds online?
No, your request can be mailed, faxed, or e-mailed as a PDF file. A request can also be submitted by fax to (512) 936-0015.
I am both a producer and purchaser for Natural Gas tax (or Crude Oil tax), what is the new requirement for payments?
Effective with any reports due after January 1, 2008, separate payments must be made for producer and purchaser. Reports and payments will be kept separate based on your sub-type (purchaser/producer).
If we have a credit balance (no errors), will these credits be automatically refunded?
No, all refund requests must be in writing.

Limited Power of Attorney


Why is a limited power of attorney required?

This ensures that a service provider or consultant has the authority to submit and file claims on behalf of a taxpayer. It also allows for access to that taxpayer's data through Web Inquiry.

It is for the protection of the taxpayer and/or the third party by allowing only access to information that has been assigned by the taxpayer.

How do I get a limited power of attorney (LPOA)?
LPOA forms are available on our Web site. You may use your own form as long as it includes complete information. The form must be signed by a representative of the company granting the authority. Unless a shorter timeframe is specified, the LPOA will be considered valid for one year from the signature date.
How do I get this information to the Comptroller?
Complete the form including your taxpayer identification number or federal tax identification number, if applicable. If you do not have an identification number, leave this information blank. Our office will assign a number for you. Fax, scan, or mail this document to our office. You and your client will be notified when this has been completed. (this applies to Form 10-341) This request may also be sent by fax to (512) 936-0007.
If I file on behalf of a number of taxpayers, do I have to have a power of attorney for each company?
Yes.
How long is the power of attorney in effect?
The power of attorney is in effect for one year from the signature date of the document, unless a shorter timeframe is specified. A notification letter will be mailed when the LPOA expires.
There are two power of attorney forms on the Web, which do I use?

Form 10-341: This form is recommended for Crude Oil and Natural Gas taxpayers who authorize a third-party to file a refund request on their behalf. This gives the third party access to all information contained within the parameters of the document including access to the taxpayer's information on the Web.

Form 01-137: This form is to be used if the taxpayer is only granting the third party the right to file paper amended reports on their behalf. It does not include the right to view or receive information on the taxpayer's account.


Web Inquiry System


I never received the letter giving me my WI (web inquiry) number; what should I do?
Contact the Crude Oil and Natural Gas Tax Section at (800) 531-5441, ext. 3-4455 or (512) 463-4455 to receive your number. Or you may send an e-mail to congtax@cpa.state.tx.us to receive your WI number. After validating your identity, you will be provided your number.
I have forgotten my PIN number; what should I do?
Contact the Electronic Reporting Section to have your PIN reset at (800) 531-5441, ext. 3-3630 or (512) 463-3630.
How often is the lease file updated?
It is updated daily from information received from the Railroad Commission.
Can we identify leases that have a drilling permit number but no lease number?
No, but you can check to see if a drilling permit number has been assigned a RRC number using the "Drilling Permit" search.
Is there a time-out limit when the inquiry is not being used?
Thirty minutes.
Can we print the Web Inquiry results?
For best results, we recommend that you copy and paste into a Word document.
Is there only one password per company?
Yes.
Can multiple people be logged in at the same time for the same company?
Yes.
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