Tex. Tax Code Section 202.058
Credits for Qualifying Low-producing Oil Leases


(a)

In this section:

(1)

“Commission” means the Railroad Commission of Texas.

(2)

“Qualifying low-producing oil lease” means a well classified as an oil well that is part of a lease whose production during a 90-day period is less than:

(A)

15 barrels of oil per day of production; or

(B)

five percent recoverable oil per barrel of produced water.

(b)

For purposes of qualifying a lease, production per well per day is determined by computing the average daily per well production from the lease using the greater of the monthly production from the well as reported in the monthly lease production reports made to the commission and the monthly production from the well as reported in the producer’s reports made to the comptroller under Section 202.201 (Producer’s Report), including any amendments to those reports. For purposes of qualifying a lease, production per well per day is measured by dividing the sum of lease production during the three-month period by the sum of the number of well-days, where a well-day is one well producing for one day. The operator of a lease that is eligible for a credit under this section only on the basis of Subsection (a)(2)(B) must pay to the comptroller a filing fee of $100 before the comptroller may authorize the credit.

(c)

Each month, the comptroller shall certify the average taxable price of oil, adjusted to 2005 dollars, during the previous three months based on various price indices available to producers, including the reported Texas Panhandle Spot Price, West Texas Intermediate Crude Spot Price, New York Mercantile Exchange, or other spot prices, as applicable. The comptroller shall publish certifications under this subsection in the Texas Register.

(d)

An operator of a qualifying low-producing lease is entitled to a 25 percent credit on the tax otherwise due on oil produced from that lease during a month if the average taxable price of oil certified by the comptroller under Subsection (c) for the previous three-month period is more than $25 per barrel but not more than $30 per barrel.

(e)

An operator of a qualifying low-producing lease is entitled to a 50 percent credit on the tax otherwise due on oil produced from that lease during a month if the average taxable price of oil certified by the comptroller under Subsection (c) for the previous three-month period is more than $22 per barrel but not more than $25 per barrel.

(f)

An operator of a qualifying low-producing lease is entitled to a 100 percent credit on the tax otherwise due on oil produced from that lease during a month if the average taxable price of oil certified by the comptroller under Subsection (c) for the previous three-month period is not more than $22 per barrel.

(g)

If the tax is paid on oil at the full rate provided by Section 202.052 (Rate of Tax), the person paying the tax is entitled to a credit against taxes imposed by this chapter or Chapter 201 (Gas Production Tax) on the amount overpaid. To receive the credit, the person must apply to the comptroller for the credit not later than the expiration of the applicable period for filing a tax refund under Section 111.104 (Refunds).

(h)

This section expires September 1, 2007.

(h)

Repealed by Acts 2007, 80th Leg., R.S., Ch. 911, Sec. 4, eff. January 1, 2008.
Added by Acts 2005, 79th Leg., Ch. 267 (H.B. 2161), Sec. 12, eff. September 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 911 (H.B. 2982), Sec. 4, eff. January 1, 2008.
Acts 2019, 86th Leg., R.S., Ch. 75 (S.B. 925), Sec. 2, eff. September 1, 2019.

Source: Section 202.058 — Credits for Qualifying Low-producing Oil Leases, https://statutes.­capitol.­texas.­gov/Docs/TX/htm/TX.­202.­htm#202.­058 (accessed Jun. 5, 2024).

202.001
Definitions
202.002
Production and Measurement of Oil
202.003
Agreement to Pay Tax Not Impaired
202.004
Inspection of Records and Reports
202.005
Employment of Auditors
202.006
Taxpayer Identification Number
202.051
Tax Imposed
202.052
Rate of Tax
202.053
Market Value
202.054
Qualification of Oil from New or Expanded Enhanced Recovery Project for Special Tax Rate
202.056
Exemption for Oil and Gas from Wells Previously Inactive
202.057
Tax Credit for Incremental Production Techniques
202.058
Credits for Qualifying Low-producing Oil Leases
202.059
Exemption for Hydrocarbons from Terra Wells
202.060
Exemption for Oil and Gas from Reactivated Orphaned Wells
202.061
Tax Credit for Enhanced Efficiency Equipment
202.063
Exemption of Oil Incidentally Produced in Association with the Production of Geothermal Energy
202.101
Producer’s Records
202.102
First Purchaser’s Records
202.103
Subsequent Purchaser’s Records
202.104
Royalty Owner’s Records
202.105
Carrier’s Records
202.151
Tax Due
202.152
Payment of Tax
202.153
First Purchaser to Pay Tax
202.154
Producer to Pay Tax on Oil Not Sold
202.155
Purchaser to Pay Tax on Oil from Property Under Legal Constraint
202.156
Tax Borne Ratably
202.201
Producer’s Report
202.202
First Purchaser’s Report
202.204
Reports of Carrier
202.205
Transfer of Ownership
202.251
Liability of Producer and Purchaser
202.252
Producer’s Remedy
202.301
Delinquent Taxes: Penalty
202.302
Tax Lien
202.303
Forced Sale by Officer
202.304
Suit for Taxes
202.305
Unlawful Removal of Oil
202.306
Inspector Has Free Access
202.307
Incomplete Records or Reports
202.351
Occupation Tax
202.352
Tax Set Aside
202.353
Allocation of Revenue
202.354
Dedication to Texas Tuition Assistance Grant Program
202.0545
Tax Exemption for Enhanced Recovery Projects Using Anthropogenic Carbon Dioxide

Accessed:
Jun. 5, 2024

§ 202.058’s source at texas​.gov