Present law imposes a tax on natural resources severed from the soil or water based upon quantity or value of the products or resources severed.

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Present law provides oil and condensate shall be taxed at a rate of 12.5% of its value at the time and place of severance.

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Present law provides oil produced from an incapable well shall be taxed at a reduced rate equal to one half of the present rate for oil established in present law (R.S. 47:633(a)) which equates to 6.25% of its value at the time and place of severance.

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Proposed law repeals present law.

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Present law provides oil produced from a stripper well shall be taxed at a reduced rate equal to one quarter of the present rate for oil established in present law (R.S. 47:633(a)) which equates to 3.125% of its value at the time and place of severance.

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Proposed law repeals present law.

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Present law provides oil produced from an inactive well shall be taxed at a reduced rate equal to one half of the present rate for oil established in present law (R.S. 47:633(a)) which equates to 6.25% of its value at the time and place of severance.

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Proposed law repeals present law.

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Present law provides oil produced from an orphan well shall be taxed at a reduced rate equal to one half of the present rate for oil established in present law (R.S. 47:633(a)) which equates to 6.25% of its value at the time and place of severance.

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Proposed law repeals present law.

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Present law provides for certain severance tax suspensions on horizontally drilled wells, certain inactive wells, and certain deep wells.

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Proposed law repeals present law.

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Present law provides the definition of value, for purposes of calculating severance tax, as the higher of (1) gross receipts received from the first purchases, less charges for trucking, barging, and pipeline fees, or (2) the posted field price.

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Effective January 1, 2027.