Generally, the production of oil in Texas is subject to tax at a rate of the greater of 4.6% of the market value of oil produced or 4.6 cents for each barrel of oil produced. Likewise, the production of gas in the state of Texas that is saved by the producer generally is subject to tax at 7.5% of the market value of such gas. Depending on the circumstances, either the producer or the first purchaser of oil or gas produced may be required to pay the tax to the Texas Comptroller. A number of exceptions and exemptions may apply.
If you have any questions about oil and gas severance taxes, please give us a call.