34 Tex. Admin. Code § 3.40 - Tax Credit for Enhanced Efficiency Equipment
(a) Definitions. The following words and
terms, when used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1)
Commission--The Railroad Commission of Texas.
(2) Operator--The person responsible under
law or commission rules for the physical operation of a lease.
(3) Institute of Higher Education--A
comptroller approved institution of higher education located in this state that
has an accredited petroleum engineering program.
(4) Marginal Well--A comptroller approved oil
well that produces 10 barrels of crude oil or less per day during the month
prior to installation of new efficiency equipment.
(b) For each marginal well qualifying under
this section, the comptroller will require the following information from the
operator of the lease.
(1) A copy of the
monthly production report made to the commission for the lease for the
qualifying month.
(2) A copy of the
evaluation from an institution of higher education certifying the name of the
enhanced efficiency equipment and that the equipment produces the required
energy reduction.
(3) A list of the
producing wells on the lease and supporting documentation to show the number of
days each well was producing during the month prior to installation of the new
efficiency equipment.
(4) A
completed comptroller exemption application for the marginal well.
(5) A statement as to whether tax has been
paid on the crude oil for periods after the effective date of the exemption,
and the name of the party paying the tax.
(6) A billing statement showing the cost of
the equipment, the cost of installation and proof that the equipment was not
purchased or installed earlier than September 1, 2005, or later than September
1, 2013.
(c) The credit
will be in effect until the accumulated credit equals 10% of the cost of the
equipment or $1,000 per marginal well, whichever occurs first.
(d) If the tax is paid at the full rate
provided by Tax Code, Chapter 202, on hydrocarbons produced on or after the
effective date of the tax exemption but before the date the comptroller
approves an application for the tax exemption, the operator is entitled to a
credit on taxes due under Tax Code, Chapter 202, in an amount equal to the tax
paid during that period within the statute of limitations. To receive a credit,
the operator or the party remitting the tax must apply to the comptroller by
filing amended reports. If a party other than the operator has remitted the
tax, the operator must provide the party remitting the tax a copy of the
approved comptroller application form that qualifies the marginal well for the
tax exemption.
(e) The comptroller
is limited to approving, each fiscal year, only the number of applications that
will not exceed a number equal to one percent of the producing marginal wells
in this state on September 1 of that state fiscal year.
Notes
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