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Notices to Industry, Publications and Statewide Rules

Incremental Production Severance Tax Exemption

Time is running out! If you have a lease that is eligible to qualify for the Incremental Production Severance Tax Incentive that went into effect September 1997, you must apply to the Railroad Commission for determination of a lease’s incremental ratio before February 11, 1999 in order to qualify for a five year, 50% tax exemption on incremental production.

Based on a recent review of Commission records, there are still many leases that may be eligible to qualify for the severance tax exemption if applications are filed timely and an incremental ratio can be certified. On Friday, February 5, the Commission made one last attempt to notify operators of leases that may be eligible through a special mail-out which included a pre-printed severance tax incentive application form. If you believe you have a lease that qualifies, but you do not receive a notice from the Commission, you should Fax a completed Form ST-1, Application for Severance Tax Incentive to the Commission anyway. Because of the impending deadline, the Commission is accepting applications by Fax until February 11, 1999. The Fax numbers you can use are (512) 463-6955 or (512) 463-7324. The Commission will review all applications and mail to operators of qualified leases the certified incremental ratio to file with the Comptroller along with Comptroller form AP-158.

If you have any questions regarding the severance tax incentive or filing requirements you may contact Dorsey Twidwell, Proration Manager, at (512) 463-6742 or e-mail him at dorsey.twidwell@rrc.state.tx.us.

Austin, Texas
February 5,1999