Natural Gas Production Tax
Sign up to receive e-mail updates when this page changesA tax is imposed on the market value of gas produced and saved in the state by the producer.
Note: Reduced Gas Production Tax Rates for Certified Exemptions: Incremental Production Exemption 3.75% (.0375) of market value of gas; 3 Year and 2 Year Inactive Well Exemptions 0.0% of market value of gas;
Co-Production Project Exemption 0.0% of market value of gas;
High-Cost Gas Exemption 0.0% of market value of gas;
High-Cost Gas Reduced Tax Rate 0.0% to 7.4% (.000 to .074) of the market value of gas, the rate varies by well depending on how the well's drilling and completion costs compare to the median cost of all High-Cost gas wells (previous State fiscal year);
Flared Gas Exemption 0.0% (.000) of market value of gas.
Notice - Effective June 26, 2011: Crude Oil and Natural Gas
Data-change and Error Notices Discontinued
In an effort to reduce costs and meet taxpayer requests for fewer notices, the Comptroller's office will stop mailing data-change and reporting error notices to crude oil and natural gas taxpayers on June 26, 2011.
Information regarding data changes and reporting errors will remain accessible on the Comptroller's CONG Web Inquiry system. Users must login to access secured information. The Web inquiry system can also be accessed from both the Crude Oil and Natural Gas pages on this website.
Notice: New Purchaser-Paid Marketing Cost Reporting Requirements
The Comptroller's office has a new method for tracking purchaser-paid marketing cost refunds, and reporting requirements (PDF, 330KB) have changed.
Notice: Enhanced Web tools available
As part of the Comptroller's ongoing effort to simplify tax reporting, several new taxpayer tools have been added to the crude oil and natural gas Web inquiry system to help taxpayers reconcile reporting periods.
Notice: New Reporting Requirements
Please read about these important changes in the December 2009 notice, New Reporting Requirements for Crude Oil and Natural Gas (PDF, 395KB).
Notice: You May Need to File Amended Reports
We have identified a miscalculation that has affected the tax rate of some leases approved from Dec. 10, 2007, through June 15, 2009, for high cost natural gas tax exemptions. If you have a lease with an exemption approved within that timeframe, you may need to amend reports for the periods affected.
You may view a list of leases that could be affected. (rate_issue.csv 421KB)
If you cannot correct the period, please contact the accounts examiner assigned to your account or call toll free (800) 531-5441 ext. 3-4455 or locally (512) 463-4455 for assistance. (posted 08/24/09)
Crude Oil and Natural Gas Reports and Procedures
The Comptroller's office has implemented changes to streamline the processing of your transfer and refund requests. (posted 08/06/08)
Incremental Production Credit History
- Incremental Production Credit Suspension Letter - 06/02/2003 (PDF, 18KB)
- Reinstatement of Tax Credit for Incremental Production Techniques - 12/31/2001 (PDF, 17KB)
Revenue and Budget Information
Texas Revenue History by Source
Rate Details and Other Information
Rates
Gas: 7.5% (.075) of market value of gas.
Condensate Production Tax: 4.6% (.046) of market value of gas.
Regulatory Fee: For report period prior to September 2001, 1/30 of a cent (.000333) for thousand cubic feet of gas produced. For report periods September 2001 and later, .000667 for thousand cubic feet of gas produced.
Due Date
Monthly: 20th day of the 2nd month following the production month. Yearly, if qualified: February 20, for preceding year.
Electronic Reporting
Yes - see left column.