Natural Gas Production Tax
A tax is imposed on the market value of gas produced and saved in the state by the producer.
You can lower your taxes owed if you qualify for an exemption certified by the Texas Railroad Commission. These exemptions and their reduced tax rates are:
- Two-Year Inactive Well Exemptions 0.0% of market value of gas;
- High-Cost Gas Reduced Tax Rate 0.0% to 7.4% (.000 to .074) of the market value of gas, the rate varies by well depending on how the well's drilling and completion costs compare to the median cost of all High-Cost gas wells (previous State fiscal year);
- Flared Gas Exemption 0.0% (.000) of market value of gas.
Beginning Nov. 1 – Revised Form AP-180 Must Be Used
The Request for Approval of Reduced Tax Rate for High Cost Gas (AP-180) has been updated. Applications submitted using the older Form AP-180 will be accepted until Oct. 31, 2012. On or after Nov. 1, 2012, the revised Form AP-180 must be used.
Effective June 26, 2011: Crude Oil and Natural Gas
Data-change and Error Notices Discontinued
In an effort to reduce costs and meet taxpayer requests for fewer notices, the Comptroller's office will stop mailing data-change and reporting error notices to crude oil and natural gas taxpayers on June 26, 2011.
Information regarding data changes and reporting errors will remain accessible on the Comptroller's CONG Web Inquiry system. Users must login to access secured information. The Web inquiry system can also be accessed from both the Crude Oil and Natural Gas pages on this website.
New Purchaser-Paid Marketing Cost Reporting Requirements
The Comptroller's office has a new method for tracking purchaser-paid marketing cost refunds, and reporting requirements (PDF, 330KB) have changed.
Enhanced Web tools available
As part of the Comptroller's ongoing effort to simplify tax reporting, several new taxpayer tools have been added to the crude oil and natural gas Web inquiry system to help taxpayers reconcile reporting periods.
Rate Details and Other Information
Gas: 7.5% (.075) of market value of gas.
Condensate Production Tax: 4.6% (.046) of market value of condensate.
Regulatory Fee: For report period prior to September 2001, 1/30 of a cent (.000333) for thousand cubic feet of gas produced. For report periods September 2001 and later, .000667 for thousand cubic feet of gas produced.
Monthly: 20th day of the 2nd month following the production month. Yearly, if qualified: February 20, for preceding year.