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Natural Gas Production Tax
Sign-up to receive e-mail updates when this page changesA tax is imposed on the market value of gas produced and saved in the state by the producer.
Note: Reduced Gas Production Tax Rates for Certified Exemptions: Incremental Production Exemption 3.75% (.0375) of market value of gas; 3 Year and 2 Year Inactive Well Exemptions 0.0% of market value of gas;
Co-Production Project Exemption 0.0% of market value of gas;
High-Cost Gas Exemption 0.0% of market value of gas;
High-Cost Gas Reduced Tax Rate 0.0% to 7.4% (.000 to .074) of the market value of gas, the rate varies by well depending on how the well's drilling and completion costs compare to the median cost of all High-Cost gas wells (previous State fiscal year);
Flared Gas Exemption 0.0% (.000) of market value of gas.
Important Notice: You May Need to File Amended Reports
We have identified a miscalculation that has affected the tax rate of some leases approved from Dec. 10, 2007, through June 15, 2009, for high cost natural gas tax exemptions. If you have a lease with an exemption approved within that timeframe, you may need to amend reports for the periods affected.
You may view a list of leases that could be affected. (rate_issue.csv 421KB)
If you cannot correct the period, please contact the accounts examiner assigned to your account or call toll free (800) 531-5441 ext. 3-4455 or locally (512) 463-4455 for assistance. (posted 08/24/09)
Important Tax News for You
The Comptroller's office has implemented changes to streamline the processing of your transfer and refund requests. (posted 08/06/08)
Crude Oil and Natural Gas Reports and Procedures
Major Changes for Crude Oil and Natural Gas Taxes(PDF, 1711KB)
Visit our online tutorial for completing the new crude oil and natural gas tax reports with due dates after January 1, 2008.
Visit our frequently asked questions pertaining to the new crude oil and natural gas tax reports and reporting procedures as of January 1, 2008.
Additional Resources
Information for Direct Deposit of Tax Refunds (PDF, 5615KB)
Crude Oil & Natural Gas Electronic Reporting Quick Reference Guide (PDF, 2379KB)
Estimating Tax Reduction for Certain High-Cost Gas
Natural Gas Severance Taxes - Audit Policy on Marketing Costs
Natural Gas Severance Taxes - County Average Gas Sales Values
Incremental Production Credit History
- Incremental Production Credit Suspension Letter - 06/02/2003 (PDF, 18KB)
- Reinstatement of Tax Credit for Incremental Production Techniques - 12/31/2001 (PDF, 17KB)
Revenue and Budget Information
Texas Revenue History by Source
Rate Details and Other Information
Rates
Gas: 7.5% (.075) of market value of gas.
Condensate Production Tax: 4.6% (.046) of market value of gas.
Regulatory Fee: For report period prior to September 2001, 1/30 of a cent (.000333) for thousand cubic feet of gas produced. For report periods September 2001 and later, .000667 for thousand cubic feet of gas produced.
Due Date
Monthly: 20th day of the 2nd month following the production month. Yearly, if qualified: February 20, for preceding year.
Electronic Reporting
Yes - see left column.