| (3) Producers and purchasers reporting high-cost gas from an oil or gas well as defined by subsection (a)(3)(B) of this section shall, after the comptroller approves the exemption, designate the gas as being exempt from tax by reporting lease type "8," which shall mean "High-Cost Gas Exemption--Co-Production Project." (4) Gas qualifying for the temporary exemption, the reduced tax rate or the exemption for gas from a co-production project must be reported separately from any non-exempt production, if any, on the same lease. (5) Producers or purchasers reporting exempt gas and non-exempt gas through the use of a commingling permit issued by the Commission must allocate the gas production between exempt and non-exempt gas by use of a method approved by the comptroller. (6) Except as provided by paragraph (5) of this subsection, producers or purchasers reporting exempt gas or non-exempt gas must report the gas by using as a part of the comptroller's lease identification number the completion number assigned by the Commission. (l) Reduced tax rate. Tax must be paid at the full rate on all 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 party paying the tax at the full rate may apply to the comptroller for a credit or refund of tax equal to the difference between the tax paid at the full rate and the tax that would be due if calculated at the reduced tax rate as defined in subsection (a)(7) of this section. (m) Limitation of tax reduction. Once the comptroller approves an application for the reduced tax rate, tax will be due at the reduced tax rate for the first 120 consecutive months beginning with the date of first production or until the cumulative value of the tax reduction equals 50% of the drilling and completion costs incurred for the well, whichever occurs first. The operator shall provide to any interest owner taking gas in-kind the amount of tax reduction calculated according to subsection (a)(7) of this section. |
| Source Note: The provisions of this §3.21 adopted to be effective November 23, 1990, 15 TexReg 6499; amended to be effective September 4, 1996, 21 TexReg 8181; amended to be effective August 4, 1998, 23 TexReg 7839; amended to be effective February 18, 2002, 27 TexReg 1177; amended to be effective October 12, 2004, 29 TexReg 9550; amended to be effective November 2, 2009, 34 TexReg 7653 |
