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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


2014

Report Period Price of Oil Eligibility
July 2014 $76.14/bbl Not Eligible for Exemption
June 2014 $75.21/bbl Not Eligible for Exemption
May 2014 $75.26/bbl Not Eligible for Exemption
April 2014 $73.81/bbl Not Eligible for Exemption
March 2014 $73.50/bbl Not Eligible for Exemption
February 2014 $71.98/bbl Not Eligible for Exemption
January 2014 $73.45/bbl Not Eligible for Exemption

2013

Report Period Price of Oil Eligibility
December 2013 $75.50/bbl Not Eligible for Exemption
November 2013 $78.57/bbl Not Eligible for Exemption
October 2013 $79.61/bbl Not Eligible for Exemption
September 2013 $76.99/bbl Not Eligible for Exemption
August 2013 $74.14/bbl Not Eligible for Exemption
July 2013 $71.08/bbl Not Eligible for Exemption
June 2013 $70.44/bbl Not Eligible for Exemption
May 2013 $70.65/bbl Not Eligible for Exemption
April 2013 $71.58/bbl Not Eligible for Exemption
March 2013 $70.70/bbl Not Eligible for Exemption
February 2013 $68.72/bbl Not Eligible for Exemption
January 2013 $67.22/bbl Not Eligible for 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

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