taxes

Crude Oil Production Tax

Crude Oil and Natural Gas Non-Critical Reported Error Messages

Effective April 27, 2015, the Comptroller's office eliminated all reported error messages considered noncritical. This means error messages labeled noncritical will no longer be displayed on the Crude Oil and Natural Gas Web Inquiry System. This will make it easier for taxpayers to review and correct all critical errors.

Who is responsible for this tax?

The first purchaser of crude oil in Texas must pay tax based on crude oil’s market value.

Rates

  • Oil production tax: 4.6% (.046) of market value of oil
  • For report periods September 2015 and later, the taxable barrels are subject to the Oil Field Clean-Up Fee of $0.00625 (5/8 of a cent) per barrel
  • For report periods September 2001 through August 2015, the taxable barrels are subject to the Regulatory Tax and Oil Field Clean-Up Fee amounts of .008125 (3/16 of a cent ($.001875) per barrel + 5/8 of a cent ($0.00625) per barrel)
  • Reduced oil production tax rates for certified exemptions:
    • Enhanced Oil Recovery Exemption (EOR): 2.3% (.023) of market value of oil
    • Two-Year Inactive Well Exemption: 0.0% (.000) of market value of oil

Due Date

Monthly: 25th day of the month following the production month (for example, April 25 for March production).

Penalties and Interest

Penalties
  • If tax is paid 1-30 days after the due date, a 5 percent penalty is assessed.
  • If tax is paid over 30 days after the due date, a 10 percent penalty is assessed.
Interest

Reporting and Payment Requirements

Select the amount of taxes you paid in the preceding state fiscal year (Sept. 1 – Aug. 31) to find the reporting and payment methods to use.

Less than $10,000

Select one of these reporting methods:

Select one of these payment methods:

$10,000 - $49,999

Select one of these reporting methods:

Select one of these payment methods:

$50,000 - $99,999

Electronic Data Interchange (EDI) is the only available reporting method.

Select one of these payment methods:

$100,000 or more

Electronic Data Interchange (EDI) is the only available reporting method.

Select one of these payment methods:

Additional Resources