Tax Exemption for Qualifying Low Producing Oil Leases
The Texas Legislature has provided a crude oil severance tax exemption for low producing oil leases. The exemption took effect Sept. 1, 2005.
To qualify for tax exemption, production on an eligible oil well as reported to the Texas Railroad Commission during the prior three months cannot exceed 15 barrels of oil per day, or 5 percent recoverable oil per barrel of produced water. The amount of exemption is based upon the Comptroller-certified average oil price for that report month. The average oil price is based upon daily index prices for the three months immediately prior to the report month.
Qualifying wells
Taxpayers can file form AP-216 (PDF, 73k) for any oil wells that meet the production requirements given above. The production per day will be determined by a computation using the monthly well production report filed with the Texas Railroad Commission divided by the number of well days. (A well day is one well producing for one day.) This exemption does not apply to casinghead gas.
Price Conditions
Oil from qualified wells becomes eligible for different levels of exemption from crude oil severance tax based upon the Comptroller-certified average price for the reporting month.
| Average Taxable Oil Price | Exemption |
|---|---|
| More Than $30 | No Exemption |
| Over $25 to $30 | 25 Percent Credit |
| Over $22 to $25 | 50 Percent Credit |
| $22 or Less | 100 Percent Credit |
The Comptroller-certified average price of oil to be used in these calculations will be posted in the Texas Register and on this Web site. When the average price falls within one of the categories listed above, oil will be allowed the corresponding level of exemption for that reporting month.
Low Producing Well Exemption
2012
| Report Period | Price of Oil | Eligibility |
|---|---|---|
| December 2012 | $68.70/bbl | Not Eligible for Exemption |
| November 2012 | $70.58/bbl | Not Eligible for Exemption |
| October 2012 | $70.38/bbl | Not Eligible for Exemption |
| September 2012 | $67.47/bbl | Not Eligible for Exemption |
| August 2012 | $67.68/bbl | Not Eligible for Exemption |
| July 2012 | $71.51/bbl | Not Eligible for Exemption |
| June 2012 | $77.59/bbl | Not Eligible for Exemption |
| May 2012 | $80.12/bbl | Not Eligible for Exemption |
| April 2012 | $79.65/bbl | Not Eligible for Exemption |
| March 2012 | $78.12/bbl | Not Eligible for Exemption |
| February 2012 | $76.69/bbl | Not Eligible for Exemption |
| January 2012 | $73.12/bbl | Not Eligible for Exemption |
2011
| Report Period | Price of Oil | Eligibility |
|---|---|---|
| December 2011 | $69.63/bbl | Not Eligible for Exemption |
| November 2011 | $66.80/bbl | Not Eligible for Exemption |
| October 2011 | $69.68/bbl | Not Eligible for Exemption |
| September 2011 | $72.57/bbl | Not Eligible for Exemption |
| August 2011 | $76.52/bbl | Not Eligible for Exemption |
| July 2011 | $79.94/bbl | Not Eligible for Exemption |
| June 2011 | $81.96/bbl | Not Eligible for Exemption |
| May 2011 | $79.43/bbl | Not Eligible for Exemption |
| April 2011 | $74.60/bbl | Not Eligible for Exemption |
| March 2011 | $71.44/bbl | Not Eligible for Exemption |
| February 2011 | $70.26/bbl | Not Eligible for Exemption |
| January 2011 | $68.39/bbl | Not Eligible for Exemption |
2010
| Report Period | Price of Oil | Eligibility |
|---|---|---|
| December 2010 | $64.80/bbl | Not Eligible for Exemption |
| November 2010 | $62.80/bbl | Not Eligible for Exemption |
| October 2010 | $61.37/bbl | Not Eligible for Exemption |
| September 2010 | $61.37/bbl | Not Eligible for Exemption |
| August 2010 | $60.70/bbl | Not Eligible for Exemption |
| July 2010 | $62.90/bbl | Not Eligible for Exemption |
| June 2010 | $64.52/bbl | Not Eligible for Exemption |
| May 2010 | $65.28/bbl | Not Eligible for Exemption |
| April 2010 | $63.75/bbl | Not Eligible for Exemption |
| March 2010 | $62.10/bbl | Not Eligible for Exemption |
| February 2010 | $62.60/bbl | Not Eligible for Exemption |
| January 2010 | $61.96/bbl | Not Eligible for Exemption |
2009
| Report Period | Price of Oil | Eligibility |
|---|---|---|
| December 2009 | $60.56/bbl | Not Eligible for Exemption |
| November 2009 | $58.71/bbl | Not Eligible for Exemption |
| October 2009 | $55.65/bbl | Not Eligible for Exemption |
| September 2009 | $55.74/bbl | Not Eligible for Exemption |
| August 2009 | $52.65/bbl | Not Eligible for Exemption |
| July 2009 | $48.88/bbl | Not Eligible for Exemption |
| June 2009 | $43.18/bbl | Not Eligible for Exemption |
| May 2009 | $37.81/bbl | Not Eligible for Exemption |
| April 2009 | $35.72/bbl | Not Eligible for Exemption |
| March 2009 | $34.19/bbl | Not Eligible for Exemption |
| February 2009 | $39.19/bbl | Not Eligible for Exemption |
| January 2009 | $48.32/bbl | Not Eligible for Exemption |
2008
| Report Period | Price of Oil | Eligibility |
|---|---|---|
| December 2008 | $64.39/bbl | Not Eligible for Exemption |
| November 2008 | $82.35/bbl | Not Eligible for Exemption |
| October 2008 | $100.28/bbl | Not Eligible for Exemption |
| September 2008 | $111.28/bbl | Not Eligible for Exemption |
| August 2008 | $113.70/bbl | Not Eligible for Exemption |
| July 2008 | $108.02/bbl | Not Eligible for Exemption |
| June 2008 | $100.25/bbl | Not Eligible for Exemption |
| May 2008 | $92.39/bbl | Not Eligible for Exemption |
| April 2008 | $87.21/bbl | Not Eligible for Exemption |
| March 2008 | $83.52/bbl | Not Eligible for Exemption |
| February 2008 | $83.55/bbl | Not Eligible for Exemption |
| January 2008 | $81.51/bbl | Not Eligible for Exemption |
2007
| Report Period | Price of Oil | Eligibility |
|---|---|---|
| December 2007 | $77.83/bbl | Not Eligible for Exemption |
| November 2007 | $71.14/bbl | Not Eligible for Exemption |
| October 2007 | $67.36/bbl | Not Eligible for Exemption |
| September 2007 | $63.03/bbl | Not Eligible for Exemption |
| August 2007 | $58.18/bbl | Not Eligible for Exemption |
| July 2007 | $58.35/bbl | Not Eligible for Exemption |
| June 2007 | $55.85/bbl | Not Eligible for Exemption |
| May 2007 | $57.95/bbl | Not Eligible for Exemption |
| April 2007 | $56.67/bbl | Not Eligible for Exemption |
| March 2007 | $53.48/bbl | Not Eligible for Exemption |
| February 2007 | $53.51/bbl | Not Eligible for Exemption |
| January 2007 | $53.12/bbl | Not Eligible for Exemption |
2006
| Report Period | Price of Oil | Eligibility |
|---|---|---|
| December 2006 | $55.01/bbl | Not Eligible for Exemption |
| November 2006 | $56.15/bbl | Not Eligible for Exemption |
| October 2006 | $60.72/bbl | Not Eligible for Exemption |
| September 2006 | $67.30/bbl | Not Eligible for Exemption |
| August 2006 | $66.61/bbl | Not Eligible for Exemption |
| July 2006 | $64.94/bbl | Not Eligible for Exemption |
| June 2006 | $61.74/bbl | Not Eligible for Exemption |
| May 2006 | $59.19/bbl | Not Eligible for Exemption |
| April 2006 | $58.42/bbl | Not Eligible for Exemption |
| March 2006 | $57.83/bbl | Not Eligible for Exemption |
| February 2006 | $56.80/bbl | Not Eligible for Exemption |
| January 2006 | $55.47/bbl | Not Eligible for Exemption |
2005
| Report Period | Price of Oil | Eligibility |
|---|---|---|
| December 2005 | $57.44/bbl | Not Eligible for Exemption |
| November 2005 | $59.71/bbl | Not Eligible for Exemption |
| October 2005 | $58.80/bbl | Not Eligible for Exemption |
| September 2005 | $55.34/bbl | Not Eligible for Exemption |
View HB 2161
Also view Natural Gas Low Producing Well Exemptions