Natural Gas Tax Refunds
All taxpayers must provide the following information when requesting a refund of taxes paid in error directly from the Comptroller's office:
- signed letter stating fully and in detail the reason for the refund claim;
- the amount of refund requested;
- date when the tax was erroneously paid (begin and end date of the period);
- taxpayer name and number; and
- Power of Attorney (01-137) or other written authorization, if being represented by an authorized agent.
Send tax refund requests to:Texas Comptroller of Public Accounts
111 E. 17th Street
Austin, TX 78774-0100
Ascertaining the producer's actual marketing costs and subtracting these costs from the producer's gross cash receipts from the sale of the gas shall determine the market value at the mouth of the well, or wellhead value.
Credit amounts filed for marketing costs reasons cannot be combined with credit amounts for tax reimbursement reasons on one amended report. The marketing cost credit amounts are required to be filed separately from the tax reimbursement credit amounts.
Refund Requests for Marketing Cost Credits
The refund request letter for marketing cost credits should indicate if producer credit amended reports and/or "Purchaser Paid Tax" schedules are included in the package.
When a producer pays the natural gas tax and claims a credit for marketing cost on a lease, then a credit-amended report is required for each reporting period.
When using the “Cost Averaging” method, include only months with production. If there is no production with a month, no costs are allowed. Also, if standard monthly costs exceed the value of gas sold, the excess cost is disallowed.
Marketing Cost Credits Claimed on Purchaser Paid Tax
Refund request letters filed by a producer for marketing cost credits where a purchaser has paid the natural gas tax must include an Assignment of Right to Refund (00-985) signed by the purchaser. A schedule listing the date, purchaser name and taxpayer, producer name and taxpayer number, lease name and number, and beginning and ending reporting periods must be attached with the Assignment of Right to Refund form.
When a purchaser pays the tax for a producer on a lease, and the producer claims the marketing cost of that lease, the following items are required by the producer:
- letter of a refund request for marketing costs credits from the producer (Assignment of Right to Refund)
- A separate schedule indicating purchaser name, purchaser taxpayer number, lease name and number, filing period, volumes, values, marketing cost credit amounts, tax credit amounts and totals.
High Cost Gas Exemption Credits
Credit for exemptions for high-cost gas leases are limited to the amount of taxes paid in the 24 months prior to applying to the Texas Railroad Commission for certification.
To receive a refund on high cost gas exemptions for taxes paid for reporting periods prior to the signature of the Comptroller's application form (AP-180), the credit amended reports must be postmarked within one year from the signature date of the Comptroller's application form. This is commonly called the “one-year window requirement.”
Recouping of the taxes paid in excess after the Comptroller's signature date can occur by filing the credit-amended reports within the four-year statute of limitations and submitting a refund request letter with all the refund elements listed above.
For refund information for Crude Oil and Natural Gas Taxes, please call 1-800-531-5441, ext. 3-4485.