HLS 25RS-215 ORIGINAL
2025 Regular Session
HOUSE BILL NO. 600
BY REPRESENTATIVE GEYMANN
TAX/SEVERANCE TAX: Reduces the rate of severance tax on oil produced from newly
completed wells and provides relative to special rates on oil produced from certain
limited-production wells
1 AN ACT
2To amend and reenact R.S. 47:633(7)(a), (b), and (c)(i)(aa), (ii)(aa), and (iv)(aa) and (bb),
3 relative to severance tax; to provide for rates of the severance tax on oil; to provide
4 for severance tax on oil produced from certain types of wells; to provide for
5 applicability; to provide for effectiveness; and to provide for related matters.
6Be it enacted by the Legislature of Louisiana:
7 Section 1. R.S. 47:633(7)(a), (b), and (c)(i)(aa), (ii)(aa), and (iv)(aa) and (bb) are
8hereby amended and reenacted to read as follows:
9 §633. Rates of tax
10 The taxes on natural resources severed from the soil or water levied by R.S.
11 47:631 shall be predicated on the quantity or value of the products or resources
12 severed and shall be paid at the following rates:
13 * * *
14 (7)(a) On oil produced from a well completed before July 1, 2025, the rate
15 of tax shall be twelve and one-half percentum percent of its value at the time and
16 place of severance. On oil produced from a well completed on or after July 1, 2025,
17 the rate of tax shall be six and one-half percent of its value at the time and place of
18 severance. Such For purposes of this Paragraph, the value of oil shall be the higher
19 of (1) the gross receipts received from the first purchaser, less charges for trucking,
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HB NO. 600
1 barging and pipeline fees, or (2) the posted field price. In the absence of an arms
2 length transaction or a posted field price, the value shall be the severer's gross
3 income from the property as determined by R.S. 47:158(C).
4 (b) On oil produced from a well classified by the commissioner of
5 conservation as an oil well, and determined by the collector of revenue secretary of
6 the Department of Revenue that such well is incapable of producing an average of
7 more than twenty-five barrels of oil per producing day during the entire taxable
8 month, and which also produces at least fifty percent salt water per day, the tax rate
9 applicable to the oil severed from such well shall be one-half of the rate set forth in
10 Subparagraph (a) of this Paragraph rate of tax shall be six and one-fourth percent of
11 its value at the time and place of severance and such well shall be defined, for
12 severance tax purposes, as an incapable well, provided that such the well has been
13 certified by the Department of Revenue as incapable of such production on or before
14 the twenty-fifth day of the second month following the month of production. Oil
15 severed from a multiple well multiple-well lease or property is not shall not be
16 subject to the reduced rate of tax provided for herein, in this Subparagraph unless all
17 such wells on the lease or property are certified as incapable.
18 (c)(i)(aa) On oil produced from a well classified by the commissioner of
19 conservation as an oil well, and certified by the Department of Revenue that such
20 well is incapable of producing an average of more than ten barrels of oil per
21 producing day during the entire taxable month, the tax rate applicable to the oil
22 severed from such well shall be one-quarter of the rate set forth in Subparagraph (a)
23 of this Paragraph rate of tax shall be three and one hundred twenty-five thousandths
24 percent of its value at the time and place of severance and such well shall be defined,
25 for severance tax purposes, as a stripper well, provided that such the well has been
26 certified by the Department of Revenue as a stripper well on or before the
27 twenty-fifth day of the second month following the month of production. Once a
28 well has been certified and determined to be incapable of producing an average of
29 more than ten barrels of oil per producing day during an entire month, such stripper
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HB NO. 600
1 that well shall remain certified as a stripper well until the well it produces an average
2 of more than ten barrels of oil per day during an entire calendar month.
3 * * *
4 (ii)(aa) On oil produced from a well in a stripper field classified by the
5 commissioner of conservation as a mining and horizontal drilling project which
6 utilizes gravity drainage to a collection point in a downhole operations room, the tax
7 rate applicable to the oil severed from such well shall be one-quarter of the rate set
8 forth in Subparagraph (a) of this Paragraph (7) rate of tax shall be three and one
9 hundred twenty-five thousandths percent of its value at the time and place of
10 severance; provided that such the well has been classified by the commissioner as
11 a mining and horizontal drilling project before the lower rate is claimed on a tax
12 return.
13 * * *
14 (iv)(aa) Production from an oil or gas well subsequent to the well's having
15 been inactive for two or more years or having thirty days or less of production during
16 the past two years shall, in the case of oil, be subject to a severance tax rate equal to
17 twenty-five percent of the rate imposed under this Paragraph or of three and one
18 hundred twenty-five thousandths percent of its value at the time and place of
19 severance and, in the case of gas, be subject to a severance tax rate equal to
20 twenty-five percent of the rate imposed by Paragraph (9) of this Section for a period
21 of ten years if the production commences before October 1, 2028. Production from
22 an oil or gas well subsequent to the well's having been designated as an orphan well
23 for longer than sixty months shall, in the case of oil, be subject to a severance tax
24 rate equal to twelve and one half percent of the rate imposed under this Paragraph
25 or of one and five hundred sixty-five thousandths percent of its value at the time and
26 place of severance and, in the case of gas, be subject to a severance tax rate equal to
27 twelve and one half percent of the rate imposed by Paragraph (9) of this Section for
28 a period of ten years if the production commences before October 1, 2028.
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1 (bb) Production from an oil or gas well subsequent to the well's having been
2 inactive for two or more years or having thirty days or less of production during the
3 past two years shall, in the case of oil, be subject to a severance tax rate equal to fifty
4 percent of the rate imposed under this Paragraph or of six and one-fourth percent of
5 its value at the time and place of severance and, in the case of gas, be subject to a
6 severance tax rate equal to fifty percent of the rate imposed by Paragraph (9) of this
7 Section for a period of ten years if the production commences on or after October 1,
8 2028. Production from an oil or gas well subsequent to the well's having been
9 designated as an orphan well for longer than sixty months shall, in the case of oil, be
10 subject to a severance tax rate equal to twenty-five percent of the rate imposed under
11 this Paragraph or of three and one hundred twenty-five thousandths percent of its
12 value at the time and place of severance and, in the case of gas, be subject to a
13 severance tax rate equal to twenty-five percent of the rate imposed by Paragraph (9)
14 of this Section for a period of ten years if the production commences on or after
15 October 1, 2028.
16 * * *
17 Section 2. The provisions of this Act shall apply to taxable periods beginning on or
18after July 1, 2025.
19 Section 3. This Act shall become effective on July 1, 2025; if vetoed by the governor
20and subsequently approved by the legislature, this Act shall become effective on July 1,
212025, or on the day following such approval by the legislature, whichever is later.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 600 Original 2025 Regular Session Geymann
Abstract: Reduces the rate of severance tax on oil produced from wells completed after
June 30, 2025, and provides for special rates on oil produced from incapable wells,
stripper wells, inactive wells, and orphan wells.
Present law provides for the levy of a tax, known as severance tax, on natural resources
severed from the soil or water. Provides that the rate of severance tax is predicated on the
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HB NO. 600
quantity or value of the products or resources severed. Establishes severance tax rates on
resources subject to the tax.
Present law provides that the severance tax on oil is 12.5% of its value at the time and place
of severance.
Proposed law reduces the severance tax for newly produced oil by establishing a severance
tax rate of 6.5% on oil produced from wells completed on or after July 1, 2025.
Present law establishes special severance tax rates for oil produced from wells designated
as incapable wells, stripper wells, inactive wells, and orphan wells pursuant to present law.
Proposed law changes the special rate on oil produced from incapable wells from one-half
of the regular rate provided for in present law and proposed law to 6.25%.
Proposed law changes the special rate on oil produced from stripper wells from one-fourth
of the regular rate provided for in present law and proposed law to 3.125%.
Proposed law changes the special rate on oil produced from inactive wells from one-half or
one-quarter of the regular rate provided for in present law and proposed law, depending on
when the oil was produced, to 6.25% or 3.125%, depending on when the oil was produced.
Proposed law changes the special rate on oil produced from orphan wells from one-fourth
or one-eighth of the regular rate provided for in present law and proposed law, depending
on when the oil was produced, to 3.125% or 1.565%, depending on when the oil was
produced.
Proposed law applies to taxable periods beginning on or after July 1, 2025.
Effective July 1, 2025.
(Amends R.S. 47:633(7)(a), (b), and (c)(i)(aa), (ii)(aa), and (iv)(aa) and (bb))
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