Tex.
Tax Code Section 202.061
Tax Credit for Enhanced Efficiency Equipment
(a)
In this section:(1)
“Enhanced efficiency equipment” means equipment used in the production of oil that reduces the energy used to produce a barrel of fluid by 10 percent or more when compared to commonly available alternative equipment. The term does not include a motor or downhole pump. Equipment does not qualify as enhanced efficiency equipment unless an institution of higher education approved by the comptroller that is located in this state and that has an accredited petroleum engineering program evaluated the equipment and determined that the equipment does produce the required energy reduction.(2)
“Marginal well” means an oil well that produces 10 barrels of oil or less per day on average during a month.(b)
The taxpayer responsible for the payment of severance taxes on the production from a marginal well in this state on which enhanced efficiency equipment is installed and used is entitled to a credit in an amount equal to 10 percent of the cost of the equipment, provided that:(1)
the cumulative total of all severance tax credits authorized by this section may not exceed $1,000 for any marginal well;(2)
the enhanced efficiency equipment installed in a qualifying marginal well must have been purchased and installed not earlier than September 1, 2005, or later than September 1, 2013;(3)
the taxpayer must file an application with the comptroller for the credit and must demonstrate to the comptroller that the enhanced efficiency equipment has been purchased and installed in the marginal well within the period prescribed by Subdivision (2);(4)
the number of applications the comptroller may approve each state fiscal year may not exceed a number equal to one percent of the producing marginal wells in this state on September 1 of that state fiscal year, as determined by the comptroller; and(5)
the manufacturer of the enhanced efficiency equipment must obtain an evaluation of the product under Subsection (a).(c)
The taxpayer may carry any unused credit forward until the credit is used.
Source:
Section 202.061 — Tax Credit for Enhanced Efficiency Equipment, https://statutes.capitol.texas.gov/Docs/TX/htm/TX.202.htm#202.061 (accessed Jun. 5, 2024).
