When natural gas tax reports are processed, report errors are identified for every reported lease transaction. One lease transaction may contain only one error message or a series of different error messages. Certain error messages are systematically changed based on the lease data reported. These types of corrections are commonly called "data changes." The primary reason data changes occur on a taxpayer's account is to quickly notify the taxpayer of changes to lease data causing tax liabilities or changes to taxpayer numbers in order to avoid future reporting errors.
Provided the data changes made on a taxpayer's account are correct, it is highly recommended taxpayers make the data change corrections on their records upon receipt of the Comptroller's data change letter or whenever data changes are viewed on the Comptroller's Web site. The process of verifying data changes by a taxpayer is highly critical because the data change may have caused a tax liability that was unexpected and immediate actions must be taken to resolve the tax liability. With an assigned Comptroller's web identification number, all taxpayers have the option to view their data changes at any time on the Comptroller's Web site: http://www.window.state.tx.us/taxinfo/nat_gas/index.html
These are the most common examples of data changes generating tax liabilities:
- Exemption has expired,
- Incorrect computation of tax due for Type 5 exemption,
- Incorrect beginning date reported for exemption,
- High cost gas exemption has reached 50 percent cap,
- Lease Use commodity reported as "NO" in "Are You Liable for Tax?" field,
- Off lease sale reported as "NO" in "Are You Liable for Tax?" field,
- 10 % penalty applies on reported exempt lease,
- One-year window requirement not met on reported exempt lease,
- Two-year window requirement not met on reported exempt lease,
- Reported exempt lease is not on Comptroller's exempt lease records, and
- Incorrect "Net Taxable Value" reported.
If a taxpayer finds that the Comptroller's office data changes are indeed invalid, the taxpayer can contact their assigned examiner and provide the pertinent information so the assigned examiner can process the corrections to the data changed immediately.
Letters from the Comptroller's office to taxpayers are mailed on a weekly basis after an original and/or amended report has processed informing the taxpayer data changes were identified for a specific report period.
Letters from the Comptroller's office to taxpayers who file:
- electronically, inform the taxpayer to view their report errors on the web.
- on paper, include a data change list identifying the changes made.
Whether the data change list is viewed on paper or on the Web, the format of the data change list is the same.
List of Reasons for Data Changes
Below is a list of the most common data changes for lease detail. Five columns indicate the following:
- First column: Line number,
- Second column: Affected field name,
- Third column: Data change message generated,
- Fourth column: Reason for data change, and
- Fifth column: How the data was changed.
Example of Data Change List Mailed With Cover Letter for Taxpayers Who File Paper Reports