TAX CODE
SUBTITLE I. SEVERANCE TAXES
CHAPTER 201. GAS PRODUCTION TAX
SUBCHAPTER A. GENERAL PROVISIONS
§ 201.001. DEFINITIONS. In this chapter:
(1) "Casinghead gas" means gas or vapor indigenous to
an oil stratum and produced from the stratum with oil.
(2) "Condensate" means liquid hydrocarbon that is or
can be recovered from gas by a separator, but does not include
liquid hydrocarbon recovered from gas by refrigeration or
absorption and separated by a fractionating process.
(3) "First purchaser" means a person who purchases gas
from a producer.
(4) "Gas" means natural gas, casinghead gas, or other
gas taken from the earth or water, whether produced from a gas well
or a well also producing oil, distillate or condensate or both, or
other products.
(5) "Producer" means a person who takes gas from the
earth or water, a person who owns, controls, manages, or leases a
gas well, or a person who owns an interest, including a royalty
interest, in gas or its value, whether the gas is produced by the
person owning the interest or by another on his behalf by lease,
contract, or other arrangement.
(6) "Production" or "gas produced" means the gross
amount of gas taken from the earth or water as determined by meter
readings that show 100 percent of the gas taken expressed in cubic
feet.
(7) "Royalty interest" means an interest in mineral
rights in a producing leasehold in the state, but does not include
the interest of the person having the management and operation of a
well.
(8) "Sour gas" means gas with more than 1-1/2 grains of
hydrogen sulfide per 100 cubic feet or more than 30 grains of
sulphur per 100 cubic feet.
(9) "Subsequent purchaser" means a person who
purchases gas from a person other than the producer of the gas.
(10) "Sweet gas" means gas other than sour gas or
casinghead gas.
Acts 1981, 67th Leg., p. 1728, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.002. MEASUREMENT OF VOLUME OF GAS. The provisions
of Section 91.052 of the Standard Gas Measurement Law, Subchapter
C, Chapter 91, Natural Resources Code, apply to this code.
Acts 1982, 67th Leg., p. 1729, ch. 389, § 1, eff. Jan. 1, 1982.
SUBCHAPTER B. TAX IMPOSED
§ 201.051. TAX IMPOSED. There is imposed a tax on each
producer of gas.
Acts 1981, 67th Leg., p. 1729, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.052. RATE OF TAX. (a) The tax imposed by this
chapter is at the rate of 7.5 percent of the market value of gas
produced and saved in this state by the producer.
(b) Repealed by Acts 2001, 77th Leg., ch. 1263, § 84(3),
eff. October 1, 2001.
Acts 1981, 67th Leg., p. 1729, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 2001, 77th Leg., ch. 1263, § 84(3), eff. Oct. 1,
2001.
§ 201.053. GAS NOT TAXED. The tax imposed by this
chapter does not apply to gas:
(1) injected into the earth in this state, unless sold
for that purpose;
(2) produced from oil wells with oil and lawfully
vented or flared;
(3) used for lifting oil, unless sold for that
purpose; or
(4) produced in this state from a well that qualifies
under Section 202.056.
Acts 1981, 67th Leg., p. 1729, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1993, 73rd Leg., ch. 1015, § 2, eff. Sept. 1,
1993.
§ 201.054. TAX ON LIQUID HYDROCARBONS. (a) There is
imposed on each producer a tax on the market value of liquid
hydrocarbons, other than condensate, recovered from gas produced in
the state by a producer.
(b) The rate of the tax imposed by this section is the same
as the rate of the tax imposed by Section 201.052 of this code.
Acts 1981, 67th Leg., p. 1729, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.055. TAX ON CONDENSATE. (a) There is imposed on
each producer a tax measured by the amount of condensate recovered
from gas produced in this state by a producer.
(b) The tax imposed by this section is at the same rate as
the rate of the tax imposed on oil by Section 202.052 of this code.
Acts 1981, 67th Leg., p. 1729, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.057. TEMPORARY EXEMPTION OR TAX REDUCTION FOR
CERTAIN HIGH-COST GAS. (a) In this section:
(1) "Commission" means the Railroad Commission of
Texas.
(2) "High-cost gas" means:
(A) high-cost natural gas as described by Section
107, Natural Gas Policy Act of 1978 (15 U.S.C. Section 3317), as
that section exists on January 1, 1989, without regard to whether
that section is in effect or whether a determination has been made
that the gas is high-cost natural gas for purposes of that Act; or
(B) all gas produced from oil wells or gas wells
within a commission approved co-production project.
(3) "Commission approved co-production project" means
a reservoir development project in which the commission has
recognized that water withdrawals from an oil or gas reservoir in
excess of specified minimum volumes will result in recovery of
additional oil and/or gas from the reservoir that would not be
produced by conventional production methods and where operators of
wells completed in the reservoir have begun to implement commission
requirements to withdraw such volumes of water and dispose of such
water outside the subject reservoir. Reservoirs potentially
eligible for this designation shall be limited to those reservoirs
in which oil and/or gas has been bypassed by water encroachment
caused by production from the reservoir and such bypassed oil
and/or gas may be produced as a result of reservoir-wide
high-volume water withdrawals of natural formation water.
(4) "High-volume water withdrawals" means the
withdrawal of water from a reservoir in an amount sufficient to
dewater portions of the reservoir containing oil and/or gas
previously bypassed by water encroachment.
(5) "Co-production" means the permanent removal of
water from an oil and/or gas reservoir in an effort to lower the
gas-water contact or oil-water contact in the reservoir or to
reduce reservoir pressure to recover entrained hydrocarbons from
the reservoir that would not be produced by conventional primary or
secondary production methods.
(6) "Operator" means the person responsible for the
actual physical operation of an oil or gas well.
(7) "Consecutive months" means months in consecutive
order, regardless of whether or not a well produces oil or gas
during any or all such months.
(b) High-cost gas as defined in Subsection (a)(2)(A) of this
section produced from a well that is spudded or completed between
May 24, 1989, and September 1, 1996, is exempt from the tax imposed
by this chapter during the period beginning September 1, 1991, and
ending August 31, 2001. High-cost gas as defined in Subsection
(a)(2)(B) of this section produced from any well regardless of spud
date or completion date is eligible for refunds of tax paid and
exemption from the tax imposed by this chapter for production
occurring during the period beginning the first day of the month
after commission approval of a co-production project and ending
August 31, 2001; provided, however, in the event co-production
ceases, the exemption shall also cease on the first day of the first
calendar month that begins on or after the 91st day following the
date of termination or co-production operations. Tax must be paid
when due at the rate provided in Section 201.052 of this code for
all high-cost gas, as defined in Subsection (a)(2)(B) of this
section, produced on or before July 31, 1995. On or after September
1, 1995, the operator may apply to the comptroller for a refund and
shall be entitled to receive a refund of all taxes paid on such
high-cost gas produced on or after the first day of the calendar
month after commission approval of the co-production project from
which such gas was produced and that is otherwise eligible for the
tax exemption.
(c) High-cost gas as defined in Subsection (a)(2)(A)
produced from a well that is spudded or completed after August 31,
1996, is entitled to a reduction of the tax imposed by this chapter
for the first 120 consecutive calendar months beginning on the
first day of production, or until the cumulative value of the tax
reduction equals 50 percent of the drilling and completion costs
incurred for the well, whichever occurs first. The amount of tax
reduction shall be computed by subtracting from the tax rate
imposed by Section 201.052 the product of that tax rate times the
ratio of drilling and completion costs incurred for the well to
twice the median drilling and completion costs for high-cost wells
as defined in Subsection (a)(2)(A) spudded or completed during the
previous state fiscal year, except that the effective rate of tax
may not be reduced below zero.
(d) Taxes must be paid when due at the rate provided in
Section 201.052 of this code on all high-cost gas, as defined in
Subsection (a)(2)(A) of this section, for wells spudded or
completed between September 1, 1996, and August 31, 1997. On or
after September 1, 1997, the operator of a well that was spudded or
completed and that produced high-cost gas between September 1,
1996, and August 31, 1997, may apply to the comptroller for a refund
and shall be entitled to receive a refund of taxes paid in excess of
the taxes that would have been due if calculated under Subsection
(c). Wells spudded or completed between September 1, 1996, and
August 31, 1997, shall also be eligible for the reduced tax under
this section for a 120-consecutive-calendar-month period as
provided for other wells qualifying under this section. The time
period for which an operator is entitled to a refund under this
section shall be included for purposes of the calculation of this
120-month period. The period of entitlement for reduced taxation
and refund for any qualifying well shall not exceed 120 consecutive
calendar months.
(e) The operator of a proposed or existing gas well,
including a gas well that has not been completed, or the operator of
any proposed or existing oil or gas well within a commission
approved co-production project, may apply to the commission for
certification that the well produces or will produce high-cost gas.
Such application, if seeking certification as high-cost gas
according to Subsection (a)(2)(A), may be made at any time after the
first day of production. The application may be made but is not
required to be made concurrently with a request for a determination
that gas produced from the well is high-cost natural gas for
purposes of the Natural Gas Policy Act of 1978 (15 U.S.C. Section
3301 et seq.) or with a request for commission approval of a
co-production project. The commission may require an applicant to
provide the commission with any relevant information required to
administer this section. For purposes of this section, a
determination that gas is high-cost natural gas according to
Subsection (a)(2)(A) or a determination that gas is produced from
within a commission approved co-production project is a
certification that the gas is high-cost gas for purposes of this
section, and in that event additional certification is not required
to qualify for the exemption or tax reduction provided by this
section.
(f) To qualify for the exemption or tax reduction provided
by this section, the person responsible for paying the tax must
apply to the comptroller. The application must contain the
certification of the commission that the well produces high-cost
gas and, if the application is for a well spudded or completed after
September 1, 1995, must contain a report of drilling and completion
costs incurred for each well on a form and in the detail as
determined by the comptroller. Drilling and completion costs for a
recompletion shall only include current and contemporaneous costs
associated with the recompletion. Notwithstanding any other
provision of this section, to obtain the maximum tax exemption or
tax deduction, an application to the comptroller for certification
according to Subsection (a)(2)(A) must be filed with the
comptroller at the later of the 180th day after the date of first
production or the 45th day after the date of approval by the
commission. If the application is not filed by the applicable
deadline, the tax exemption or tax deduction is reduced by 10
percent for the period beginning on the 180th day after the first
day of production and ending on the date on which the application is
filed with the comptroller. An application to the comptroller for
certification according to Subsection (a)(2)(B) may not be filed
before January 1, 1990, or after December 31, 1998. The comptroller
shall approve the application of a person who demonstrates that the
gas is eligible for the exemption or tax reduction. The comptroller
may require a person applying for the exemption or tax reduction to
provide any relevant information in the person's monthly report
that the comptroller considers necessary to administer this
section. The commission shall notify the comptroller in writing
immediately if it determines that an oil or gas well previously
certified as producing high-cost gas does not produce high-cost gas
or if it takes any action or discovers any information that affects
the eligibility of gas for an exemption or tax reduction under this
section.
(g) As soon as practicable after March 1 of each year, the
comptroller shall determine from reports containing drilling and
completion cost data as required on applications to the comptroller
under Subsection (f), the median drilling and completion cost for
all high-cost wells as defined in Subsection (a)(2)(A) for which
application for exemption or reduced tax was made during the
previous state fiscal year. Those median drilling and completion
costs shall be used to compute the reduced tax under Subsection (c).
(h) Information regarding drilling and completion costs
included on an application under Subsection (f) is confidential and
may not be disclosed, except to the extent aggregated with other
similar information to produce industry averages. Unauthorized
disclosure is an offense subject to the same penalty as provided by
Section 111.007 for unauthorized disclosure of federal tax return
information.
(i) If, before the commission certifies that a well produces
high-cost gas or before the comptroller approves an application for
an exemption or tax reduction under this section, the tax imposed by
this chapter is paid on high- cost gas that otherwise qualifies for
the exemption or tax reduction provided by this section, the
producer or producers of the gas are entitled to a credit against
other taxes imposed by this chapter in an amount equal to the amount
of the tax paid on the gas that otherwise qualified for the
exemption or tax reduction on or after the first day of the next
month after the month in which the application for certification
under this section was filed with the commission. If the
application for certification is submitted to the commission after
January 1, 2004, the total allowable credit for taxes paid for
reporting periods before the date the application is filed may not
exceed the total tax paid on the gas that otherwise qualified for
the exemption or tax reduction and that was produced during the 24
consecutive calendar months immediately preceding the month in
which the application for certification under this section was
filed with the commission. The credit is allocated to each producer
according to the producer's proportionate share in the gas. To
receive a credit, one or more of the producers must apply to the
comptroller for the credit not later than the first anniversary
after the date the comptroller approves the application for an
exemption or tax reduction under this section. If a producer
demonstrates that the producer does not have sufficient tax
liability under this chapter to claim the credit within five years
from the date the application for the credit is made, the producer
is entitled to a refund in the amount of any credit the comptroller
determines may not be claimed within that five years. Nothing in
this subsection shall relieve the obligation imposed by Subsection
(b) to pay tax when due on high-cost gas produced from co-production
projects on or before July 31, 1995.
(j) An applicant for commission approval of a co-production
project shall submit a written application for approval to the
commission. Such application must be filed before January 1, 1994.
The applicant shall provide the commission with any relevant
information required to administer this section, including
evidence demonstrating that the reservoir is eligible for the
designation and demonstrating the minimum volumes of high-volume
water withdrawal required to recover oil and/or gas from the
reservoir that would not be produced by conventional production
methods. A commission representative may administratively approve
the application. If the commission representative denies
administrative approval, the applicant shall have the right to a
hearing upon the request.
Added by Acts 1989, 71st Leg., ch. 1197, § 1, eff. Sept. 1, 1989.
Amended by Acts 1993, 73rd Leg., ch. 958, § 1, eff. Sept. 1,
1993; Acts 1995, 74th Leg., ch. 895, § 1, eff. Sept. 1, 1995;
Acts 1997, 75th Leg., ch. 1040, § 52, 53, eff. Sept. 1, 1997;
Acts 1999, 76th Leg., ch. 365, § 1, eff. Aug. 30, 1999; Acts
2003, 78th Leg., ch. 209, § 52, eff. Oct. 1, 2003; Acts 2003,
78th Leg., ch. 1310, § 110, eff. Sept. 1, 2003.
§ 201.058. TAX EXEMPTIONS. (a) The exemptions
described by Sections 202.056, 202.057, and 202.059 apply to the
taxes imposed by this chapter as authorized by and subject to the
certifications and approvals required by those sections.
(b) Operators increasing production by marketing gas from
an oil well or lease that has been released into the air for 12
months or more pursuant to the rules of the commission shall be
entitled to an exemption from the tax imposed by this chapter on the
production resulting from the marketing of such gas for the life of
the well or lease.
Added by Acts 1995, 74th Leg., ch. 989, § 3, eff. Jan. 1, 1996.
Amended by Acts 1997, 75th Leg., ch. 1060, § 1, eff. Sept. 1,
1997.
SUBCHAPTER C. DETERMINING VALUE
§ 201.101. MARKET VALUE. (a) The market value of gas
is its value at the mouth of the well from which it is produced. The
value of gas at the mouth of the well is determined by ascertaining
the producer's actual marketing costs and subtracting those costs
from the producer's gross cash receipts from the sale of the gas.
(b) Marketing costs are the costs incurred by the producer
to get the gas from the mouth of the well to the market, including:
(1) costs for compressing the gas sold;
(2) costs for dehydrating the gas sold;
(3) costs for sweetening the gas sold; and
(4) costs for delivering the gas to the purchaser.
(c) Marketing costs do not include:
(1) costs incurred in producing the gas;
(2) costs incurred in normal lease separation of the
oil or condensate; or
(3) insurance premiums on the marketing facility.
(d) Marketing costs are determined by adding:
(1) a reasonable charge for depreciation of the
marketing facility being used, provided that, if the facility is
rented, the actual rental fee is added;
(2) a return on the producer-owned investment equal to
six percent per year on the average depreciable balance;
(3) costs of direct or allocated labor associated with
the marketing facility;
(4) costs of materials, supplies, maintenance,
repairs, and fuel associated with the marketing facility; and
(5) ad valorem taxes paid on the marketing facility.
(e) If the facility is used for a purpose other than
marketing the gas being sold, the cost shall be allocated
accordingly.
(f) If the facility is handling gas for outside parties, the
average cost for handling all of the gas shall be applied against
the facility owner's gas.
(g) The actual cost being charged a producer by an outside
party for marketing functions may be used for tax purposes if no
other benefit or value accrues to the producer.
(h) A producer receiving a cost reimbursement from the gas
purchaser shall include the reimbursement in the gross cash
receipts and is entitled to deduct the actual marketing costs
incurred.
Acts 1981, 67th Leg., p. 1730, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 2003, 78th Leg., ch. 1310, § 111, eff. Sept. 1,
2003.
§ 201.102. CASH SALES. If gas is sold for cash only, the
tax shall be computed on the producer's gross cash receipts.
Payments from a purchaser of gas to a producer for the purpose of
reimbursing the producer for taxes due under this chapter are part
of the gross cash receipts unless the reimbursement amount for
taxes due under this chapter is separately stated in the sales
contract.
Acts 1981, 67th Leg., p. 1730, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 2003, 78th Leg., ch. 1310, § 112, eff. Sept. 1,
2003.
§ 201.103. VALUE IF CONSIDERATION INCLUDES
EXTRACTS. If the consideration for the sale of gas includes
products extracted from the gas, a portion of the residue gas, or
both, the tax shall be computed on the gross value of all things of
value received by the producer, including a bonus or premium.
Acts 1981, 67th Leg., p. 1730, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.104. RETURNED CYCLE GAS. (a) If gas is processed
for its liquid hydrocarbon content and the residue gas is returned
to a gas-producing formation by cycling methods, as distinguished
from repressuring or pressure maintenance methods, the taxable
value of the gas is three-fifths the value of all liquid
hydrocarbons extracted, separated, and saved from the gas.
(b) The value of the liquid hydrocarbons for the purpose of
this section is the highest posted price of crude oil in the field
where the gas is produced. If no oil is produced in that field, the
value is the highest posted price for crude oil in the nearest oil
field.
(c) The value of the liquid hydrocarbons is determined when
they are extracted and separated from gas and before they are
absorbed, refined, or processed. The quantity of the liquid
hydrocarbons is the yield from the gas at the processing plant.
(d) The valuation method prescribed by this section
controls over the valuation methods described in Sections 201.102
and 201.103 of this code only in circumstances in which Subsection
(a) of this section applies.
Acts 1981, 67th Leg., p. 1730, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.105. VALUE OF LIQUID HYDROCARBONS OTHER THAN
CONDENSATE. The taxable value of liquid hydrocarbons other than
condensate is the producer's total gross receipts for all liquid
hydrocarbons, including condensate, recovered from gas produced by
him less the taxable value of the condensate recovered from that
gas.
Acts 1981, 67th Leg., p. 1730, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.106. VALUE OF CONDENSATE. The value of condensate
for the purpose of computing the tax due on it is the prevailing
price for condensate in the general area where it is recovered.
Acts 1981, 67th Leg., p. 1730, ch. 389, § 1, eff. Jan. 1, 1982.
SUBCHAPTER D. RECORDS
§ 201.151. PRODUCER'S RECORDS. A producer shall keep
accurate records of all gas the producer produces. The records
shall be kept in the state.
Acts 1981, 67th Leg., p. 1731, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.152. PURCHASER'S RECORDS. A purchaser shall keep
accurate records of all gas the purchaser purchases. The records
shall be kept in the state.
Acts 1981, 67th Leg., p. 1731, ch. 389, § 1, eff. Jan. 1, 1982.
SUBCHAPTER E. REPORTS AND PAYMENTS
§ 201.201. TAX DUE. The tax imposed by this chapter for
gas produced and saved is due at the office of the comptroller in
Austin on the 20th day of the second month following the month of
production.
Acts 1981, 67th Leg., p. 1731, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1995, 74th Leg., ch. 1000, § 63, eff. Oct. 1,
1995.
§ 201.202. PAYMENT OF TAX. The tax imposed by this
chapter must be paid by legal tender or cashier's check payable to
the comptroller.
Acts 1981, 67th Leg., p. 1731, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1997, 75th Leg., ch. 1423, § 19.120, eff. Sept.
1, 1997.
§ 201.203. PRODUCER'S REPORT. (a) On or before the
last day of each calendar month, each producer shall file a report
with the comptroller on forms prescribed by the comptroller. The
report must contain the following information concerning gas
produced during the preceding calendar month:
(1) the gross amount of gas produced that is subject to
the tax imposed by this chapter;
(2) the leases from which the gas was produced;
(3) the names and addresses of the first purchasers of
the gas; and
(4) other information the comptroller may reasonably
require.
(b) If the report the producer is required to file shows
additional tax due, the producer must pay the additional tax when he
files the report.
(c) If the producer is required to report and pay the tax
under Section 201.2041 of this code, the producer's report shall
include for that gas any additional information required to be
reported by a first purchaser under Section 201.2035 of this code
for gas for which the first purchaser is required to pay the tax.
Acts 1981, 67th Leg., p. 1731, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1983, 68th Leg., p. 1378, ch. 284, § 8, eff.
Sept. 1, 1983; Acts 1987, 70th Leg., 2nd C.S., ch. 6, art. 4, §
1, eff. July 21, 1987; Acts 1999, 76th Leg., ch. 1183, § 2, eff.
Sept. 1, 2001.
§ 201.2035. FIRST PURCHASER'S REPORT. (a) On or
before the last day of each calendar month, each first purchaser
must file a report with the comptroller on forms prescribed by the
comptroller. The report must contain the following information
concerning gas purchased from a producer during the preceding
calendar month:
(1) the gross amount of gas purchased from each
producer;
(2) the price paid for the gas;
(3) the leases from which the gas was produced; and
(4) other information the comptroller may reasonably
require.
(b) If the report the first purchaser is required to file
shows any additional tax due, the first purchaser must pay the tax
when he files the report.
Added by Acts 1983, 68th Leg., p. 1378, ch. 284, § 9, eff. Sept.
1, 1983. Amended by Acts 1999, 76th Leg., ch. 1183, § 3, eff.
Sept. 1, 2001.
§ 201.2037. DISCLOSURE OF CERTAIN
INFORMATION. Notwithstanding any provision of this chapter or
Chapter 202, neither the comptroller nor the Railroad Commission of
Texas may require disclosure of information relating to receipt
points, delivery points, volumes, rates, or other natural gas
transportation contractual information under this chapter or
Chapter 202 unless the disclosure is reasonably necessary for the
comptroller or commission to implement or administer this chapter
or Chapter 202. This section expires September 1, 1999.
Added by Acts 1997, 75th Leg., ch. 1040, § 54, eff. Sept. 1,
1997.
§ 201.204. FIRST PURCHASER TO PAY TAX. (a) Except as
provided by Section 201.2041, a [A] first purchaser shall pay the
tax imposed by this chapter on gas that the first purchaser
purchases from a producer and takes delivery on the premises where
the gas is produced.
(b) A first purchaser shall withhold from payments to the
producer the amount of the tax that the first purchaser is required
to pay. This subsection does not affect a lease or contract between
the state or a political subdivision of the state and a producer.
(c) Money withheld by a first purchaser under this section
is held in trust for the use and benefit of the state and may not be
commingled with other funds of the first purchaser.
Acts 1981, 67th Leg., p. 1731, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 6, art. 4, § 2,
eff. July 21, 1987.
§ 201.2041. PRODUCER TO PAY TAX ON CERTAIN GAS. If the
first purchaser takes delivery of gas off the premises on which the
gas is produced, the producer shall report and pay the tax imposed
by this chapter on the volume of gas produced from the premises. In
that event, the first purchaser is not required to report the
purchase of the gas on the report required by Section 201.2035 of
this code or pay the tax on that gas.
Added by Acts 1987, 70th Leg., 2nd C.S., ch. 6, art. 4, § 3, eff.
July 21, 1987.
§ 201.205. TAX BORNE RATABLY. The tax shall be borne
ratably by all interested parties, including royalty interests.
Producers or purchasers of gas, or both, are authorized and
required to withhold from any payment due interested parties the
proportionate tax due and remit it to the comptroller.
Acts 1981, 67th Leg., p. 1731, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.206. TRANSFER OF OWNERSHIP. (a) If a
gas-producing lease is transferred or is to be transferred, the
producer transferring the lease shall note the name and address of
the producer acquiring the lease and the date of the transfer on the
last report that covers the lease and that he is required by Section
201.203 of this code to file.
(b) If a gas-producing lease is transferred, the producer
acquiring the lease shall note the date of the transfer and the name
and address of the person from whom the lease was acquired on the
first report that covers the lease and that he is required by
Section 201.203 of this code to file.
Acts 1981, 67th Leg., p. 1732, ch. 389, § 1, eff. Jan. 1, 1982.
SUBCHAPTER F. LIABILITY FOR TAX
§ 201.251. LIABILITY OF PRODUCER AND
PURCHASER. (a) The tax imposed by this chapter is the primary
liability of the producer and, except as provided by Subsection (b)
of this section, is a liability of the first purchaser and each
subsequent purchaser. Failure of the first purchaser to pay the tax
does not relieve the producer or a subsequent purchaser from
liability for the tax. A purchaser of gas produced in the state
shall satisfy himself that the tax on that gas has been or will be
paid by the person liable for the tax.
(b) The first purchaser is not liable for the tax imposed by
this chapter on gas for which the producer is required to pay the
tax as provided by Section 201.2041 of this code, unless the first
purchaser purchases the gas for resale or resells the gas.
Acts 1981, 67th Leg., p. 1732, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 6, art. 4, § 4,
eff. July 21, 1987.
§ 201.252. PRODUCER'S REMEDY. If a purchaser withholds
the amount of the tax imposed by this chapter from payments to a
producer for the sale of gas and fails to pay the tax as provided by
this chapter, the producer may sue the purchaser to recover the
amount of the tax withheld, penalties and interest that have
accrued from failure to pay the tax, court costs, and reasonable
attorney's fees.
Acts 1981, 67th Leg., p. 1732, ch. 389, § 1, eff. Jan. 1, 1982.
SUBCHAPTER G. ENFORCEMENT
§ 201.301. INVESTIGATIONS. The comptroller may enter
the premises of a taxpayer liable for a tax imposed by this chapter
or any other premises necessary to determine tax liability in order
to examine books or records of a person subject to a tax imposed by
this chapter or to secure any information related to the
enforcement of this chapter.
Acts 1981, 67th Leg., p. 1732, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.302. AUDITS. (a) The comptroller shall employ
auditors and other technical assistants to verify reports and
investigate the affairs of producers and purchasers to determine
whether the tax is properly reported and paid.
(b) A producer who has failed to pay the proper amount of
tax, a penalty, or interest due is liable for the reasonable
expenses incurred by representatives of the comptroller in the
investigation or the reasonable value of their services. The
amount for which the producer is liable under this subsection is an
additional penalty.
Acts 1981, 67th Leg., p. 1732, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.303. TAX LIEN. (a) If a tax imposed by this
chapter is delinquent or if interest or a penalty on a delinquent
tax has not been paid, the state has a prior lien for the tax,
penalty, and interest on all property and equipment used by the
producer to produce gas.
(b) The lien may be enforced by a suit filed by the attorney
general. Venue of the suit is in Travis County.
Acts 1981, 67th Leg., p. 1733, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.304. SUIT FOR TAXES; SWORN DENIAL. Rule 185,
Texas Rules of Civil Procedure, applies to a suit by the attorney
general for taxes imposed by this chapter if:
(1) the attorney general files as an exhibit a report
or audit of the taxpayer; and
(2) the exhibit is supported by the comptroller's
affidavit that the taxes shown to be due are past due and unpaid and
that all payments and credits have been allowed.
Acts 1981, 67th Leg., p. 1733, ch. 389, § 1, eff. Jan. 1, 1982.
SUBCHAPTER H. PENALTIES
§ 201.351. DELINQUENT TAX; PENALTY. (a) A person who
fails to pay the tax imposed by this chapter when due forfeits five
percent of the amount due as a penalty, and if the person fails to
pay the tax within 30 days after the day on which the tax is due, the
person forfeits an additional five percent.
(b) The minimum penalty provided by this section is $1.
Acts 1981, 67th Leg., p. 1733, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1983, 68th Leg., p. 453, ch. 93, § 7, eff. Sept.
1, 1983.
§ 201.352. UNLAWFUL REMOVAL OF GAS. On notice from the
comptroller, no person may produce or remove natural or casinghead
gas from a lease in this state if the owner or operator of the lease
has failed to file a report or pay a tax as required by this chapter.
Acts 1981, 67th Leg., p. 1733, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 1, § 11, eff. July
21, 1987.
§ 201.353. INCOMPLETE RECORDS OR REPORTS; CONCEALING
PROPERTY UNDER LIEN; PENALTY. (a) A person commits an offense if
the person:
(1) with intent to defraud the state, knowingly fails
to keep a complete record that the person is required by this
chapter to keep;
(2) knowingly fails to file a complete report on or
before the day the person is required by this chapter to file the
report; or
(3) with intent to defraud the state, conceals
property or equipment that is under a lien authorized by Section
201.303 of this code.
(b) An offense under this section is a misdemeanor
punishable by:
(1) a fine of not less than $100 nor more than $1,000;
(2) confinement in county jail for not more than 12
months; or
(3) both a fine and confinement.
(c) In addition to the criminal penalty, a person is liable
for a civil penalty of $1,000 if the person:
(1) performs any act constituting an offense under
Subsection (a) of this section;
(2) with intent to defraud the state, makes a false
entry in any record the person is required by this chapter to keep;
(3) destroys, damages, or conceals a record the person
is required by this chapter to keep;
(4) falsifies a report the person is required by this
chapter to file; or
(5) violates any rule promulgated under this section.
Acts 1981, 67th Leg., p. 1733, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.354. COLLECTION OF CIVIL PENALTY. (a) The
attorney general shall bring a suit for the collection of a penalty
imposed by Section 201.353(c) of this code.
(b) Venue of a suit under this section is in the county where
the violation occurs.
(c) A suit under this section may be joined with any other
civil suit provided for by this chapter.
Acts 1981, 67th Leg., p. 1734, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.355. GENERAL PENALTY. (a) A person commits an
offense if the person violates or fails to comply with any provision
of this chapter.
(b) An offense under this section is a misdemeanor
punishable by a fine of not less than $100 nor more than $1,000. A
separate offense is committed each day that a violation of a
provision of this chapter continues.
Acts 1981, 67th Leg., p. 1734, ch. 389, § 1, eff. Jan. 1, 1982.
SUBCHAPTER I. CLASSIFICATION OF TAX AND ALLOCATION OF REVENUE
§ 201.401. OCCUPATION TAX. The tax imposed by this
chapter is an occupation tax.
Acts 1981, 67th Leg., p. 1734, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.402. PENALTY COLLECTED FOR AUDITS OR
INVESTIGATIONS. A penalty collected for the expense or value of
audits or investigations authorized by Section 201.302 of this code
shall be deposited in the general revenue fund.
Acts 1981, 67th Leg., p. 1734, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.403. TAX SET ASIDE. One-half of one percent of
the tax collected under this chapter shall be set aside in the state
treasury for the use of the comptroller to administer and enforce
the provisions of this chapter, subject to appropriation by the
legislature. Money set aside by this section that is not spent at
the end of a fiscal year reverts proportionally to the other funds
to which the taxes imposed by this chapter are paid.
Acts 1981, 67th Leg., p. 1734, ch. 389, § 1, eff. Jan. 1, 1982.
§ 201.404. ALLOCATION OF REVENUE. After deducting the
amount required to be deposited by Section 201.403 of this code, the
comptroller shall deposit one-fourth of the revenue collected from
the tax imposed by this chapter to the credit of the foundation
school fund and three-fourths to the general revenue fund.
Acts 1981, 67th Leg., p. 1734, ch. 389, § 1, eff. Jan. 1, 1982.
Amended by Acts 1981, 67th Leg., p. 2778, ch. 752, § 9(h), eff.
Jan. 1, 1982; Acts 1984, 68th Leg., 2nd C.S., ch. 28, art. II, part
B, § 7, eff. Sept. 1, 1984.
