taxes

Oil and Gas Well Servicing Tax

Who is responsible for paying this tax?

Those in the business of providing certain well services must pay this tax if they:

  • own, control, or furnish the tools, instruments and equipment used in providing well service; or
  • use any chemical, electrical or mechanical process in providing service at any oil or gas well during the drilling and completion, or reworking or reconditioning, of the oil or gas well.

Taxable services include:

  • Cementing the casing seat
  • Shooting the formation
  • Fracturing the formation
  • Acidizing the formation
  • Surveying or testing the formation

Rates

2.42 percent (.0242) of taxable services.

Due Date

Monthly: 20th day of the month following the end of each calendar month (for example, due April 20 for March activity).

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
  • Past due taxes are charged interest beginning 61 days after the due date.
  • To calculate interest on past due taxes, visit Interest Owed and Earned.

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 $500,000

Select one of these reporting methods:

Select one of these payment methods:

  • Web Electronic Funds Transfer (EFT) or credit card via Webfile (American Express, Discover and MasterCard and Visa)
  • TEXNET
  • Check
$500,000 or more

Select one of these reporting methods:

TEXNET is the only acceptable payment method.

Additional Resources