taxes

Electronic Reports for Low-Producing Well Exemptions (Exempt Type 11) Filing Instructions

Original Reports

Before creating an original report, set the average taxable gas price (Avg NG Price) range for all leases to "Exempt Type 11," which will be included on the original report:

  1. Open the Petro software, and click on the "Lease Setups" icon (fourth from the top).
  2. Find an Exempt Type 11 lease, and double click to open.
  3. Select the correct "Avg NG Price" range (bottom of setup screen) and save.
  4. Close the lease, and choose another until you have set all Exempt Type 11 lease entries to the correct "Avg NG Price" range for the report period you are filing.
  5. Close the "Lease Setups Index" window, and open the "Report Index" icon (fifth from the top).
  6. Click on the "New" icon (first in the second row of icons), and complete the report header, choosing "Original" as your report type.
  7. Select "Exempt Type 11," and enter the volumes and values for each of the lease entries.
  8. The Petro software will adjust the "Net Taxable Value" field based on the "Avg NG Price" range chosen.

Amended Reports

It is not necessary to set the average taxable gas price range on "Exempt Type 11" leases before creating an amended report. Follow these steps to file an amended report:

  1. Click the "Report Index" icon (fifth from the top).
  2. Click the "New" icon (first in the second row of icons), and complete the report header, choosing "Amended" as your report type.
  3. If the volume and value amounts were previously reported and these amounts need to be amended to claim Exempt Type 11, credit out the volumes and values as originally reported including the "Net Taxable Value" field.
  4. Select "Exempt Type 11," and enter the volumes and values through the "Marketing Costs" field.
  5. Manually calculate the "Net Taxable Value" field, and multiply the result by the appropriate percentage of the low-producing well exemption for the report period you are amending.
  6. Enter the manually adjusted amount into the "Net Taxable Value" field.

EXAMPLES

Amended report for value amounts not previously reported for a commodity:

Lease #234567 qualifies for the low-producing well exemption for the May 2013 report period. The raw gas commodity must be reported for this lease. The May 2013 report period is eligible for a 50 percent credit. The following value amounts should be reported for the low-producing well exemption:

DESCRIPTION VALUE AMOUNTS TO BE REPORTED AS EXEMPT TYPE 11
Your Value $5,000
Less Marketing Costs $1,150
Net Taxable Value $1,925
($5,000 - $1,150 = $3,850 X .50 = $1,925) (This field must be manually calculated.)
Tax Due $144.38
($1,925 X .075 = $144.38) (The system calculates this field.)
Value amounts were previously reported and need to be amended to claim the low-producing well exemption:

Lease #289101 qualifies for the low-producing well exemption for the November 2012 report period. The November 2012 report period is eligible for a 100 percent credit and must be amended to claim the low-producing well exemption. Two transactions must be filed on the amended report to claim the credit for the lease:

DESCRIPTION ORIGINAL REPORT FILED WITH THE LEASE TYPE 2 FIRST TRANSACTION REQUIRED ON AMENDED REPORT TO CREDIT OUT VALUES FOR LEASE TYPE 2 NET ADJUSTMENT FOR LEASE TYPE 2
Your Value $7,700 ($7,700) $0
Less Marketing Costs $1,420 ($1,420) $0
Net Taxable Value $6,280
($7,700 - $1,420 = $6,280)
($6,280) $0
Tax Due $471
($6,280 x .075 = $471)
($471) $0
DESCRIPTION SECOND TRANSACTION REQUIRED ON AMENDED REPORT TO ADD VALUES FOR EXEMPT TYPE 11
Your Value $7,700
Less Marketing Costs $1,420
Net Taxable Value $0 (100% exempt) (This field must be manually calculated.)
Tax Due $0 (The system calculates this field.)