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Producer Reporting Requirements for Marketing Cost Refund Claims

Whenever producers submit a refund claim for marketing cost credits and purchasers have paid the tax of specific leases, reporting requirements have been established for tracking these refund claims and reporting marketing cost credits.

To accurately post refund claims for marketing costs on the Comptroller’s records, the producer (or consultant who has filed a Limited Power of Attorney) must file credit-amended reports on the purchaser’s account, when all or a portion of the refund, comes from purchaser-paid taxes. This process ensures all credits for marketing costs reported by producers are recorded on the Comptroller’s computer system.

To file credit-amended reports for marketing cost credits on the purchaser’s account and to receive a refund of purchaser-paid taxes, producers or consultants must submit the following documents for all pending and future refund claims for marketing costs:

  1. letter requesting a refund for the marketing cost credits;
  2. Limited Power of Attorney (Form 10-341), signed by each purchaser;
  3. Assignment of Right to Refund (Form 00-985), signed by each purchaser; and
  4. schedule(s) listing credit amounts for each report period and each purchaser.

After these credit-amended reports are filed to a purchaser’s account, and provided the credit-amended reports do not contain critical errors, the credit amounts will be validated, deemed refundable and then transferred to the producer’s account for refund purposes. Examples of when a credit amount is not refundable from a purchaser’s account:

  • a purchaser’s account has delinquent liabilities in other report periods and/or
  • the credit amount generated from a credit amendment is not available in the corresponding report period. A reduction of the credit amount occurred because a previous liability existed.

Credit-amended reports filed by a producer and processed to a purchaser’s account must include:

  • commodity code;
  • lease type;
  • lease number;
  • county number;
  • exemption type, if applicable;
  • producer taxpayer number;
  • “Yes” block marked in the report field titled, “Are you liable for the tax?”;
  • marketing cost amount and
  • credit amount in the report field titled, “Net Taxable Value”.

If you have questions, please contact the Crude Oil and Natural Gas Tax Section at (800) 531-5441, ext.3-4455.

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