Reduced gross production tax suggested in legislative bills

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Two bills filed in the Oklahoma legislature to be considered in the upcoming legislative session call for lower gross production taxes on oil and gas production in the state.

Sen. Dusty Deevers, R-Elgin, introduced SB311 which would lower the state’s current 7% gross production tax to 5%.

“Upon the production of oil a tax equal to seven percent (7%)
five percent (5%) of the gross value of the production of oil based
on a per barrel measurement of forty-two (42) U.S. gallons of two
hundred thirty-one (231) cubic inches per gallon, computed at a
temperature of sixty (60) degrees Fahrenheit;
2. Upon the production of gas a tax equal to seven percent (7%)
five percent (5%) of the gross value of the production of gas,” stated the legislation.

A bill filed by Rep. Brad Boles, R-Marlow, would also lower the gross production tax but on recovery wells. HB1372

states that “any production which results from a recovery project from a well on the Corporation Commissions’ orphaned well list shall receive a fifty-percent reduction from the gross production tax…”

The reduced gross production tax would be in effect for 36 months after which the rate would increase to the full rate of tax.