taxes

Tax Exemption for Qualifying Low-Producing Oil Leases

The Texas Legislature has provided a crude oil severance tax exemption for low-producing oil leases since Sept. 1, 2005.

To qualify for crude oil severance tax exemption, production on an eligible oil lease as reported to the Texas Railroad Commission during the prior three months is less than:

  • 15 barrels of oil per day; or
  • 5 percent recoverable oil per barrel of produced water.

The amount of exemption is based upon the Comptroller-certified average oil price for that report month. The average oil price is based upon daily index prices for the three months immediately prior to the report month.

Qualifying leases

Taxpayers can file Form AP-216, Texas Crude Oil Lease Exemption Application (PDF) for any oil leases that meet the production requirements given above.

The production per day will be determined using the monthly lease production report, filed with the Texas Railroad Commission, divided by the number of lease days. (A lease day is one lease producing for one day.)

This exemption does not apply to casinghead gas.

Price Conditions

Oil from qualified leases becomes eligible for different levels of exemption from crude oil severance tax based upon the Comptroller-certified average price for the reporting month.

Average Taxable Oil Price Exemption
More than $30 No exemption
Over $25 to $30 25 percent credit
Over $22 to to $25 50 percent credit
$22 or less 100 percent credit

The Comptroller-certified average price of oil to be used in these calculations is posted in the Texas Register and on this webpage. When the average price falls within one of the categories in the table above, oil will be allowed the corresponding level of exemption for that reporting month.

Pricing Schedules and Exemption Eligibility by Month
Report Period Price of Oil Eligibility
October 2017 $36.83/bbl Not Eligible for Exemption
September 2017 $36.08/bbl Not Eligible for Exemption
August 2017 $36.04/bbl Not Eligible for Exemption
July 2017 $37.04/bbl Not Eligible for Exemption
June 2017 $37.15/bbl Not Eligible for Exemption
May 2017 $37.95/bbl Not Eligible for Exemption
April 2017 $37.42/bbl Not Eligible for Exemption
March 2017 $38.58/bbl Not Eligible for Exemption
February 2017 $36.50/bbl Not Eligible for Exemption
January 2017 $36.79/bbl Not Eligible for Exemption
2016
2016
Report Period Price of Oil Eligibility
December 2016 $35.26/bbl Not Eligible for Exemption
November 2016 $35.48 /bbl Not Eligible for Exemption
October 2016 $33.46/bbl Not Eligible for Exemption
September 2016 $33.68/bbl Not Eligible for Exemption
August 2016 $33.39/bbl Not Eligible for Exemption
July 2016 $32.24/bbl Not Eligible for Exemption
June 2016 $29.52/bbl Eligible for 25% Credit
May 2016 $25.90/bbl Eligible for 25% Credit
April 2016 $24.13/bbl Eligible for 50% Credit
March 2016 $24.76/bbl Eligible for 50% Credit
February 2016 $28.48/bbl Eligible for 25% Credit
January 2016 $32.53/bbl Not Eligible for Exemption
2015
2015
Report Period Price of Oil Eligibility
December 2015 $34.67/bbl Not Eligible for Exemption
November 2015 $34.62 /bbl Not Eligible for Exemption
October 2015 $35.63/bbl Not Eligible for Exemption
September 2015 $38.95/bbl Not Eligible for Exemption
August 2015 $42.56/bbl Not Eligible for Exemption
July 2015 $43.02/bbl Not Eligible for Exemption
June 2015 $39.88/bbl Not Eligible for Exemption
May 2015 $37.91/bbl Not Eligible for Exemption
April 2015 $36.40/bbl Not Eligible for Exemption
March 2015 $39.32/bbl Not Eligible for Exemption
February 2015 $45.47/bbl Not Eligible for Exemption
January 2015 $54.41/bbl Not Eligible for Exemption
2014
2014
Report Period Price of Oil Eligibility
December 2014 $62.52/bbl Not Eligible for Exemption
November 2014 $67.38/bbl Not Eligible for Exemption
October 2014 $71.75/bbl Not Eligible for Exemption
September 2014 $74.70/bbl Not Eligible for Exemption
August 2014 $76.10/bbl Not Eligible for Exemption
July 2014 $76.14/bbl Not Eligible for Exemption
June 2014 $75.21/bbl Not Eligible for Exemption
May 2014 $75.26/bbl Not Eligible for Exemption
April 2014 $73.81/bbl Not Eligible for Exemption
March 2014 $73.50/bbl Not Eligible for Exemption
February 2014 $71.98/bbl Not Eligible for Exemption
January 2014 $73.45/bbl Not Eligible for Exemption
2013
2013
Report Period Price of Oil Eligibility
December 2013 $75.50/bbl Not Eligible for Exemption
November 2013 $78.57/bbl Not Eligible for Exemption
October 2013 $79.61/bbl Not Eligible for Exemption
September 2013 $76.99/bbl Not Eligible for Exemption
August 2013 $74.14/bbl Not Eligible for Exemption
July 2013 $71.08/bbl Not Eligible for Exemption
June 2013 $70.44/bbl Not Eligible for Exemption
May 2013 $70.65/bbl Not Eligible for Exemption
April 2013 $71.58/bbl Not Eligible for Exemption
March 2013 $70.70/bbl Not Eligible for Exemption
February 2013 $68.72/bbl Not Eligible for Exemption
January 2013 $67.22/bbl Not Eligible for Exemption
2012
2012
Report Period Price of Oil Eligibility
December 2012 $68.70/bbl Not Eligible for Exemption
November 2012 $70.58/bbl Not Eligible for Exemption
October 2012 $70.38/bbl Not Eligible for Exemption
September 2012 $67.47/bbl Not Eligible for Exemption
August 2012 $67.68/bbl Not Eligible for Exemption
July 2012 $71.51/bbl Not Eligible for Exemption
June 2012 $77.59/bbl Not Eligible for Exemption
May 2012 $80.12/bbl Not Eligible for Exemption
April 2012 $79.65/bbl Not Eligible for Exemption
March 2012 $78.12/bbl Not Eligible for Exemption
February 2012 $76.69/bbl Not Eligible for Exemption
January 2012 $73.12/bbl Not Eligible for Exemption
2011
2011
Report Period Price of Oil Eligibility
December 2011 $69.63/bbl Not Eligible for Exemption
November 2011 $66.80/bbl Not Eligible for Exemption
October 2011 $69.68/bbl Not Eligible for Exemption
September 2011 $72.57/bbl Not Eligible for Exemption
August 2011 $76.52/bbl Not Eligible for Exemption
July 2011 $79.94/bbl Not Eligible for Exemption
June 2011 $81.96/bbl Not Eligible for Exemption
May 2011 $79.43/bbl Not Eligible for Exemption
April 2011 $74.60/bbl Not Eligible for Exemption
March 2011 $71.44/bbl Not Eligible for Exemption
February 2011     $70.26/bbl Not Eligible for Exemption
January 2011 $68.39/bbl Not Eligible for Exemption
2010
2010
Report Period Price of Oil Eligibility
December 2010 $64.80/bbl Not Eligible for Exemption
November 2010 $62.80/bbl Not Eligible for Exemption
October 2010 $61.37/bbl Not Eligible for Exemption
September 2010 $61.37/bbl Not Eligible for Exemption
August 2010 $60.70/bbl Not Eligible for Exemption
July 2010 $62.90/bbl Not Eligible for Exemption
June 2010 $64.52/bbl Not Eligible for Exemption
May 2010 $65.28/bbl Not Eligible for Exemption
April 2010 $63.75/bbl Not Eligible for Exemption
March 2010 $62.10/bbl Not Eligible for Exemption
February 2010 $62.60/bbl Not Eligible for Exemption
January 2010 $61.96/bbl Not Eligible for Exemption
2009
2009
Report Period Price of Oil Eligibility
December 2009 $60.56/bbl Not Eligible for Exemption
November 2009 $58.71/bbl Not Eligible for Exemption
October 2009 $55.65/bbl Not Eligible for Exemption
September 2009 $55.74/bbl Not Eligible for Exemption
August 2009 $52.65/bbl Not Eligible for Exemption
July 2009 $48.88/bbl Not Eligible for Exemption
June 2009 $43.18/bbl Not Eligible for Exemption
May 2009 $37.81/bbl Not Eligible for Exemption
April 2009 $35.72/bbl Not Eligible for Exemption
March 2009 $34.19/bbl Not Eligible for Exemption
February 2009 $39.19/bbl Not Eligible for Exemption
January 2009 $48.32/bbl Not Eligible for Exemption
2008
2008
Report Period Price of Oil Eligibility
December 2008 $64.39/bbl Not Eligible for Exemption
November 2008 $82.35/bbl Not Eligible for Exemption
October 2008 $100.28/bbl Not Eligible for Exemption
September 2008 $111.28/bbl Not Eligible for Exemption
August 2008 $113.70/bbl Not Eligible for Exemption
July 2008 $108.02/bbl Not Eligible for Exemption
June 2008 $100.25/bbl Not Eligible for Exemption
May 2008 $92.39/bbl Not Eligible for Exemption
April 2008 $87.21/bbl Not Eligible for Exemption
March 2008 $83.52/bbl Not Eligible for Exemption
February 2008 $83.55/bbl Not Eligible for Exemption
January 2008 $81.51/bbl Not Eligible for Exemption
2007
2007
Report Period Price of Oil Eligibility
December 2007 $77.83/bbl Not Eligible for Exemption
November 2007 $71.14/bbl Not Eligible for Exemption
October 2007 $67.36/bbl Not Eligible for Exemption
September 2007 $63.03/bbl Not Eligible for Exemption
August 2007 $58.18/bbl Not Eligible for Exemption
July 2007 $58.35/bbl Not Eligible for Exemption
June 2007 $55.85/bbl Not Eligible for Exemption
May 2007 $57.95/bbl Not Eligible for Exemption
April 2007 $56.67/bbl Not Eligible for Exemption
March 2007 $53.48/bbl Not Eligible for Exemption
February 2007 $53.51/bbl Not Eligible for Exemption
January 2007 $53.12/bbl Not Eligible for Exemption
2006
2006
Report Period Price of Oil Eligibility
December 2006 $55.01/bbl Not Eligible for Exemption
November 2006 $56.15/bbl Not Eligible for Exemption
October 2006 $60.72/bbl Not Eligible for Exemption
September 2006 $67.30/bbl Not Eligible for Exemption
August 2006 $66.61/bbl Not Eligible for Exemption
July 2006 $64.94/bbl Not Eligible for Exemption
June 2006 $61.74/bbl Not Eligible for Exemption
May 2006 $59.19/bbl Not Eligible for Exemption
April 2006 $58.42/bbl Not Eligible for Exemption
March 2006 $57.83/bbl Not Eligible for Exemption
February 2006 $56.80/bbl Not Eligible for Exemption
January 2006 $55.47/bbl Not Eligible for Exemption
2005
2005
Report Period Price of Oil Eligibility
December 2005 $57.44/bbl Not Eligible for Exemption
November 2005 $59.71/bbl Not Eligible for Exemption
October 2005 $58.80/bbl Not Eligible for Exemption
September 2005 $55.34/bbl Not Eligible for Exemption