taxes

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

How To Report the Low-Producing Well Exemption (Exempt Type 11)

If a report period is eligible for the low-producing well exemption:

  • For the producer report, report Fields 1 through 21.
  • For the purchaser report, report Fields 1 through 19 for the commodities of raw gas, lease use, residue and products.

In the "Net Taxable Value" field for the producer and purchaser reports, to determine the tax due amount for the lease:

  1. Multiply the “Net Taxable Value” field by the appropriate percentage.
  2. Enter the reduced amount in the “Net Taxable Value” field.
  3. Multiply the “Net Taxable Value” field by 7.5 percent.

EXAMPLES

Value amounts were 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)
Tax Due $144.38
($1,925 X .075 = $144.38)
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)
Tax Due $0