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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

taxes

TAX CREDIT FOR QUALIFYING LOW-PRODUCING OIL LEASES

Texas law provides a crude oil tax credit for low-producing oil leases.

Qualifications

  1. A qualifying low-producing oil lease is a well classified as an oil well by the Texas Railroad Commission that is part of a lease whose production during a 90-day period is less than an average of:
    • 15 barrels of oil per day of production; or
    • 5 percent recoverable oil per barrel of produced water. This requires a $100 filing/application fee.
    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. (A lease day is one lease producing for one day.)
  2. Production per well per day is determined by computing the average daily well production from the lease using the greater of the monthly production from the well as reported in:
    • the monthly lease production reports filed with the Texas Railroad Commission, including amended reports; and
    • the monthly severance tax reports, including amended reports that are filed by producers and purchasers with the Comptroller’s office and who report as liable for the tax.
    Production reports not filed with the Texas Railroad Commission and the Comptroller’s office for any of the prior three months will cause the lease to be ineligible for the tax credit.
  3. Taxpayers must file Form AP-216, Texas Crude Oil Lease Tax Exemption Application (PDF) for approval of the tax credit for a low-producing oil lease, and all the required information must be provided. Any information listed below that is not provided in Form AP-216 will result in a delay in the approval process which could potentially cause a denial of a tax credit.

    Form AP-216 – Required Information Description
    Taxpayer number Texas 11-digit taxpayer number assigned by the Comptroller’s office.
    Lease information from Railroad Commission’s records Enter all of the following:
    • Lease name
    • County name and Comptroller’s county code;
    • Date of first production, or start date;
    • District number;
    • Lease number;
    • Eight-digit API number only if the lease has one API number assigned. Leave blank if the lease has more than one API number assigned; and
    • Well completion date.
    If the lease produced less than 5 percent of recoverable oil per barrel of produced water:
    • select the amount of production that applies; and
    • include $100 filing fee with Form AP-216.
    Select one of the following:
    • Less than 15 barrels of oil per day; or
    • Less than 5 percent of recoverable oil per barrel of produced water.
    Enter the three months that were prior to the beginning date of the tax credit for the qualifying low-producing lease Example – The report period for the qualifying low-producing lease began June 2020. The three months prior to June 2020 entered in Form AP-216 are March, April, and May 2020.
    Enter two types of sums

    Refer to the example titled, “Daily Average Calculation Example for Low-Producing Leases (PDF)

    Enter the following:
    • The sum of lease production during the initial three-month period; and
    • The sum of the number of “well days,” where a “well day” means one well producing for one well
    Attached document, if applicable
    Information from authorized individual Enter all of the following:
    • Name and title;
    • Phone number;
    • Email address; and
    • Signature and signature date.

Certified Average Oil Price

  • The amount of a tax credit can be 25%, 50%, or 100% and is based upon the Comptroller-certified average oil price posted on this webpage each month.
  • The average oil price is based upon daily index prices for the prior three months for each report period.

Four-Year Statute of Limitations

  • Four years from the due date of a report period determines the four-year statute of limitation date.
  • Form AP-216 and applicable tax reports must be postmarked by the four-year statute of limitation date of the qualifying report period.
  • The four-year statute of limitations does not apply to the prior three months listed on Form AP-216.

Tax credits for low-producing leases do not apply to production of 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 Eligibility
More than $30 No credit
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 Credit Eligibility by Month

2022
Report Period Price of Oil Eligibility
October 2022 $61.87/bbl Not Eligible for Credit
September 2022 $68.62/bbl Not Eligible for Credit
August 2022 $72.23/bbl Not Eligible for Credit
July 2022 $73.35/bbl Not Eligible for Credit
June 2022 $72.70/bbl Not Eligible for Credit
May 2022 $69.22/bbl Not Eligible for Credit
April 2022 $64.69/bbl Not Eligible for Credit
March 2022 $56.56/bbl Not Eligible for Credit
February 2022 $53.90/bbl Not Eligible for Credit
January 2022 $53.54/bbl Not Eligible for Credit
2021
2021
Report Period Price of Oil Eligibility
December 2021 $53.18/bbl Not Eligible for Credit
November 2021 $49.88/bbl Not Eligible for Credit
October 2021 $48.20/bbl Not Eligible for Credit
September 2021 $48.67/bbl Not Eligible for Credit
August 2021 $49.12/bbl Not Eligible for Credit
July 2021 $46.96/bbl Not Eligible for Credit
June 2021 $45.25/bbl Not Eligible for Credit
May 2021 $43.97/bbl Not Eligible for Credit
April 2021 $41.63/bbl Not Eligible for Credit
March 2021 $37.78/bbl Not Eligible for Credit
February 2021 $33.36/bbl Not Eligible for Credit
January 2021 $30.26/bbl Not Eligible for Credit
2020
2020
Report Period Price of Oil Eligibility
December 2020 $28.46/bbl Eligible for 25 percent Credit
November 2020 $28.60/bbl Eligible for 25 percent Credit
October 2020 $27.68/bbl Eligible for 25 percent Credit
September 2020 $26.13/bbl Eligible for 25 percent Credit
August 2020 $22.24/bbl Eligible for 50 percent Credit
July 2020 $17.86/bbl Eligible for 100 percent Credit
June 2020 $17.62/bbl Eligible for 100 percent Credit
May 2020 $24.27/bbl Eligible for 50 percent Credit
April 2020 $34.63/bbl Not Eligible for Credit
March 2020 $41.99/bbl Not Eligible for Credit
February 2020 $43.48/bbl Not Eligible for Credit
January 2020 $42.38/bbl Not Eligible for Credit
2019
2019
Report Period Price of Oil Eligibility
December 2019 $41.53/bbl Not Eligible for Credit
November 2019 $40.91/bbl Not Eligible for Credit
October 2019 $41.80/bbl Not Eligible for Credit
September 2019 $41.25/bbl Not Eligible for Credit
August 2019 $42.89/bbl Not Eligible for Credit
July 2019 $44.52/bbl Not Eligible for Credit
June 2019 $45.00/bbl Not Eligible for Credit
May 2019 $42.91/bbl Not Eligible for Credit
April 2019 $39.37/bbl Not Eligible for Credit
March 2019 $36.87/bbl Not Eligible for Credit
February 2019 $36.68/bbl Not Eligible for Credit
January 2019 $40.67/bbl Not Eligible for Credit
2018
2018
Report Period Price of Oil Eligibility
December 2018 $46.06/bbl Not Eligible for Credit
November 2018 $49.28/bbl Not Eligible for Credit
October 2018 $50.14/bbl Not Eligible for Credit
September 2018 $49.64/bbl Not Eligible for Credit
August 2018 $51.26/bbl Not Eligible for Credit
July 2018 $50.86/bbl Not Eligible for Credit
June 2018 $50.20/bbl Not Eligible for Credit
May 2018 $42.37/bbl Not Eligible for Credit
April 2018 $45.98/bbl Not Eligible for Credit
March 2018 $44.09/bbl Not Eligible for Credit
February 2018 $42.95/bbl Not Eligible for Credit
January 2018 $40.10/bbl Not Eligible for Credit
2017
2017
Report Period Price of Oil Eligibility
December 2017 $38.69/bbl Not Eligible for Credit
November 2017 $37.32/bbl Not Eligible for Credit
October 2017 $36.83/bbl Not Eligible for Credit
September 2017 $36.08/bbl Not Eligible for Credit
August 2017 $36.04/bbl Not Eligible for Credit
July 2017 $37.04/bbl Not Eligible for Credit
June 2017 $37.15/bbl Not Eligible for Credit
May 2017 $37.95/bbl Not Eligible for Credit
April 2017 $37.42/bbl Not Eligible for Credit
March 2017 $38.58/bbl Not Eligible for Credit
February 2017 $36.50/bbl Not Eligible for Credit
January 2017 $36.79/bbl Not Eligible for Credit
2016
2016
Report Period Price of Oil Eligibility
December 2016 $35.26/bbl Not Eligible for Credit
November 2016 $35.48 /bbl Not Eligible for Credit
October 2016 $33.46/bbl Not Eligible for Credit
September 2016 $33.68/bbl Not Eligible for Credit
August 2016 $33.39/bbl Not Eligible for Credit
July 2016 $32.24/bbl Not Eligible for Credit
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 Credit
2015
2015
Report Period Price of Oil Eligibility
December 2015 $34.67/bbl Not Eligible for Credit
November 2015 $34.62 /bbl Not Eligible for Credit
October 2015 $35.63/bbl Not Eligible for Credit
September 2015 $38.95/bbl Not Eligible for Credit
August 2015 $42.56/bbl Not Eligible for Credit
July 2015 $43.02/bbl Not Eligible for Credit
June 2015 $39.88/bbl Not Eligible for Credit
May 2015 $37.91/bbl Not Eligible for Credit
April 2015 $36.40/bbl Not Eligible for Credit
March 2015 $39.32/bbl Not Eligible for Credit
February 2015 $45.47/bbl Not Eligible for Credit
January 2015 $54.41/bbl Not Eligible for Credit
2014
2014
Report Period Price of Oil Eligibility
December 2014 $62.52/bbl Not Eligible for Credit
November 2014 $67.38/bbl Not Eligible for Credit
October 2014 $71.75/bbl Not Eligible for Credit
September 2014 $74.70/bbl Not Eligible for Credit
August 2014 $76.10/bbl Not Eligible for Credit
July 2014 $76.14/bbl Not Eligible for Credit
June 2014 $75.21/bbl Not Eligible for Credit
May 2014 $75.26/bbl Not Eligible for Credit
April 2014 $73.81/bbl Not Eligible for Credit
March 2014 $73.50/bbl Not Eligible for Credit
February 2014 $71.98/bbl Not Eligible for Credit
January 2014 $73.45/bbl Not Eligible for Credit
2013
2013
Report Period Price of Oil Eligibility
December 2013 $75.50/bbl Not Eligible for Credit
November 2013 $78.57/bbl Not Eligible for Credit
October 2013 $79.61/bbl Not Eligible for Credit
September 2013 $76.99/bbl Not Eligible for Credit
August 2013 $74.14/bbl Not Eligible for Credit
July 2013 $71.08/bbl Not Eligible for Credit
June 2013 $70.44/bbl Not Eligible for Credit
May 2013 $70.65/bbl Not Eligible for Credit
April 2013 $71.58/bbl Not Eligible for Credit
March 2013 $70.70/bbl Not Eligible for Credit
February 2013 $68.72/bbl Not Eligible for Credit
January 2013 $67.22/bbl Not Eligible for Credit
2012
2012
Report Period Price of Oil Eligibility
December 2012 $68.70/bbl Not Eligible for Credit
November 2012 $70.58/bbl Not Eligible for Credit
October 2012 $70.38/bbl Not Eligible for Credit
September 2012 $67.47/bbl Not Eligible for Credit
August 2012 $67.68/bbl Not Eligible for Credit
July 2012 $71.51/bbl Not Eligible for Credit
June 2012 $77.59/bbl Not Eligible for Credit
May 2012 $80.12/bbl Not Eligible for Credit
April 2012 $79.65/bbl Not Eligible for Credit
March 2012 $78.12/bbl Not Eligible for Credit
February 2012 $76.69/bbl Not Eligible for Credit
January 2012 $73.12/bbl Not Eligible for Credit
2011
2011
Report Period Price of Oil Eligibility
December 2011 $69.63/bbl Not Eligible for Credit
November 2011 $66.80/bbl Not Eligible for Credit
October 2011 $69.68/bbl Not Eligible for Credit
September 2011 $72.57/bbl Not Eligible for Credit
August 2011 $76.52/bbl Not Eligible for Credit
July 2011 $79.94/bbl Not Eligible for Credit
June 2011 $81.96/bbl Not Eligible for Credit
May 2011 $79.43/bbl Not Eligible for Credit
April 2011 $74.60/bbl Not Eligible for Credit
March 2011 $71.44/bbl Not Eligible for Credit
February 2011     $70.26/bbl Not Eligible for Credit
January 2011 $68.39/bbl Not Eligible for Credit
2010
2010
Report Period Price of Oil Eligibility
December 2010 $64.80/bbl Not Eligible for Credit
November 2010 $62.80/bbl Not Eligible for Credit
October 2010 $61.37/bbl Not Eligible for Credit
September 2010 $61.37/bbl Not Eligible for Credit
August 2010 $60.70/bbl Not Eligible for Credit
July 2010 $62.90/bbl Not Eligible for Credit
June 2010 $64.52/bbl Not Eligible for Credit
May 2010 $65.28/bbl Not Eligible for Credit
April 2010 $63.75/bbl Not Eligible for Credit
March 2010 $62.10/bbl Not Eligible for Credit
February 2010 $62.60/bbl Not Eligible for Credit
January 2010 $61.96/bbl Not Eligible for Credit
2009
2009
Report Period Price of Oil Eligibility
December 2009 $60.56/bbl Not Eligible for Credit
November 2009 $58.71/bbl Not Eligible for Credit
October 2009 $55.65/bbl Not Eligible for Credit
September 2009 $55.74/bbl Not Eligible for Credit
August 2009 $52.65/bbl Not Eligible for Credit
July 2009 $48.88/bbl Not Eligible for Credit
June 2009 $43.18/bbl Not Eligible for Credit
May 2009 $37.81/bbl Not Eligible for Credit
April 2009 $35.72/bbl Not Eligible for Credit
March 2009 $34.19/bbl Not Eligible for Credit
February 2009 $39.19/bbl Not Eligible for Credit
January 2009 $48.32/bbl Not Eligible for Credit
2008
2008
Report Period Price of Oil Eligibility
December 2008 $64.39/bbl Not Eligible for Credit
November 2008 $82.35/bbl Not Eligible for Credit
October 2008 $100.28/bbl Not Eligible for Credit
September 2008 $111.28/bbl Not Eligible for Credit
August 2008 $113.70/bbl Not Eligible for Credit
July 2008 $108.02/bbl Not Eligible for Credit
June 2008 $100.25/bbl Not Eligible for Credit
May 2008 $92.39/bbl Not Eligible for Credit
April 2008 $87.21/bbl Not Eligible for Credit
March 2008 $83.52/bbl Not Eligible for Credit
February 2008 $83.55/bbl Not Eligible for Credit
January 2008 $81.51/bbl Not Eligible for Credit
2007
2007
Report Period Price of Oil Eligibility
December 2007 $77.83/bbl Not Eligible for Credit
November 2007 $71.14/bbl Not Eligible for Credit
October 2007 $67.36/bbl Not Eligible for Credit
September 2007 $63.03/bbl Not Eligible for Credit
August 2007 $58.18/bbl Not Eligible for Credit
July 2007 $58.35/bbl Not Eligible for Credit
June 2007 $55.85/bbl Not Eligible for Credit
May 2007 $57.95/bbl Not Eligible for Credit
April 2007 $56.67/bbl Not Eligible for Credit
March 2007 $53.48/bbl Not Eligible for Credit
February 2007 $53.51/bbl Not Eligible for Credit
January 2007 $53.12/bbl Not Eligible for Credit
2006
2006
Report Period Price of Oil Eligibility
December 2006 $55.01/bbl Not Eligible for Credit
November 2006 $56.15/bbl Not Eligible for Credit
October 2006 $60.72/bbl Not Eligible for Credit
September 2006 $67.30/bbl Not Eligible for Credit
August 2006 $66.61/bbl Not Eligible for Credit
July 2006 $64.94/bbl Not Eligible for Credit
June 2006 $61.74/bbl Not Eligible for Credit
May 2006 $59.19/bbl Not Eligible for Credit
April 2006 $58.42/bbl Not Eligible for Credit
March 2006 $57.83/bbl Not Eligible for Credit
February 2006 $56.80/bbl Not Eligible for Credit
January 2006 $55.47/bbl Not Eligible for Credit
2005
2005
Report Period Price of Oil Eligibility
December 2005 $57.44/bbl Not Eligible for Credit
November 2005 $59.71/bbl Not Eligible for Credit
October 2005 $58.80/bbl Not Eligible for Credit
September 2005 $55.34/bbl Not Eligible for Credit