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53	53	STATE OF OKLAHOMA
54	54
55	55	1st Session of the 60th Legislature (2025)
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57	57	SENATE BILL 311 By: Deevers
58	58
59	59
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63	63	AS INTRODUCED
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65	65	An Act relating to taxation; amending 68 O.S. 2021,
66	66	Section 1001, as amended by Section 8, Chapter 346,
67	67	O.S.L. 2022 (68 O.S. Supp. 2024, Section 1001), which
68	68	relates to gross production tax on certain interests;
69	69	modifying tax rate; updating statutory references;
70	70	updating statutory language; and providing an
71	71	effective date.
72	72
73	73
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75	75	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
76	76	SECTION 1. AMENDATORY 68 O.S. 2021, Section 1001, as
77	77	amended by Section 8, Chapter 346, O.S.L. 2022 (68 O.S. Supp. 2024,
78	78	Section 1001), is amended to read as follows:
79	79	Section 1001. A. There is hereby levied upon the production of
80	80	asphalt, ores bearing lead, zinc, jack and copper a tax equal to
81	81	three-fourths of one percent (3/4 of 1%) on the gross value thereof.
82	82	B. On or after the effective date of this act Upon the
83	83	effective date of this act and except as provided by paragraph 4 o f
84	84	this subsection, there shall be levied a tax on the gross value of
85	85	the production of oil and gas as follows:
86	86	1. Upon the production of oil a tax equal to seven percent (7%)
87	87	five percent (5%) of the gross value of the production of oil based
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139	139	on a per barrel measurement of forty -two (42) U.S. gallons of two
140	140	hundred thirty-one (231) cubic inches per gallon, computed at a
141	141	temperature of sixty (60) degrees Fahrenheit;
142	142	2. Upon the production of gas a tax equal to seven percent (7%)
143	143	five percent (5%) of the gross value of the production of gas;
144	144	3. Notwithstanding the levies in paragrap hs 1 and 2 of this
145	145	subsection, the production of oil, gas, or oil and gas from wells
146	146	spudded prior to the effective date of this act July 18, 2018, and
147	147	on or after the effective date of this act July 18, 2018, shall be
148	148	taxed at a rate of five percent (5%) commencing with the month of
149	149	first production for a period of thirty -six (36) months.
150	150	Thereafter, the production shall be taxed as provided in paragraphs
151	151	1 and 2 of this subsect ion; and
152	152	4. If the provisions of Article XIII -C of the Oklahoma
153	153	Constitution are approved by the people pursuant to adoption of
154	154	State Question No. 795, the rate of gross production tax imposed by
155	155	paragraph 3 of this subsection shall be reduced to two perc ent (2%)
156	156	for the first thirty -six (36) months of production and thereafter
157	157	the rate of taxation shall be seven percent (7%).
158	158	C. The taxes hereby levied shall also attach to, and are levied
159	159	on, what is known as the royalty interest, and the amount of such
160	160	tax shall be a lien on such interest.
161	161	D. 1. Except as otherwise provided in this section, for
162	162	secondary and tertiary recovery projects approved or having an
163	163
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214	214	initial project start date on or after July 1, 2022, all production
215	215	which results from such secon dary and tertiary recovery projects
216	216	shall be exempt from the gross production tax levied pursuant to
217	217	this section for a period not to exceed five (5) years from the
218	218	initial project start date or for a period ending upon the
219	219	termination of the secondary and tertiary recovery process,
220	220	whichever occurs first.
221	221	2. For purposes of this s ubsection, “project start date” means
222	222	the date on which the injection of liquids, gases, or other matter
223	223	begins on an enhanced recovery project.
224	224	3. For new secondary and tertiar y recovery projects approved by
225	225	the Oklahoma Corporation Commission on or after July 1, 2022, such
226	226	approval shall constitute qualification for an exemption.
227	227	4. For all production exempted pursuant to this subsection, a
228	228	refund against gross production taxe s shall be issued as provided in
229	229	subsection F of this section.
230	230	E. Except as otherwise provided by this section, the production
231	231	of oil, gas, or oil and gas from wells drilled but not completed as
232	232	of July 1, 2021, which are completed with the use of recycle d water
233	233	on or after July 1, 2022, shall earn an exemption from the gross
234	234	production tax levied from the date of first sales for a period of
235	235	twenty-four (24) months. The exemption provided in this subsection
236	236	shall be proportional to the percentage of the t otal amount of water
237	237	used to complete the well that is recycled water. For al l
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289	289	production exempted pursuant to this subsection, a refund against
290	290	gross production taxes shall be issued as provided in subsection F
291	291	of this section. For purposes of this subs ection, “recycled water”
292	292	means oil and gas produced water and waste that has been
293	293	reconditioned or treated by mechanical or chemical processes into a
294	294	reusable form.
295	295	F. On or after July 1, 2022, for all oil and gas production
296	296	exempt from gross production t axes pursuant to subsections D and E
297	297	of this section during a given fiscal yea r, a refund of gross
298	298	production taxes shall be issued to the well operator or a designee
299	299	in the amount of such exempted gross production taxes paid during
300	300	such period, subject to the following provisions:
301	301	1. A refund shall not be claimed until after the end of the
302	302	fiscal year. As used in this subsection, a fiscal year shall be
303	303	deemed to begin on July 1 of one calendar year and shall end on June
304	304	30 of the subsequent calendar year ;
305	305	2. Unless otherwise specified, no claims for refunds pursuant
306	306	to the provisions of this subsection shall be filed more than
307	307	eighteen (18) months after the first day of the fiscal year in which
308	308	the refund is first available;
309	309	3. Any person claiming a ref und pursuant to the exemption
310	310	provided in subsections D and E of this section shall file an
311	311	application with the Oklahoma Tax Commission which, upon
312	312
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363	363	determination of qualification by the Corporation Commission, shall
364	364	approve the application for such exempt ion;
365	365	4. The Tax Commission may require any person claiming a refund
366	366	pursuant to the exemptions provided in subsections D and E of this
367	367	section to furnish information or records concerning the exemption
368	368	as is deemed necessary by the Tax Commission;
369	369	5. No claims for refunds pursuant to the provisions of this
370	370	subsection shall be filed by or on behalf of persons other than the
371	371	operator or a working interest owner of record at the time of
372	372	production;
373	373	6. No entity, including subsidiaries of the entity, shall b e
374	374	authorized to receive refunds claimed pursuant to the exemption
375	375	provided in subsection D of this section that exceed twenty percent
376	376	(20%) of the limitation provided in paragraph 7 of this subsection;
377	377	and
378	378	7. The total amount of refunds authorized shall n ot exceed
379	379	Fifteen Million Dollars ($15,000,000.00) pursuant to the exemption
380	380	provided in subsection D of this section and Ten Million Dollars
381	381	($10,000,000.00) pursuant to the exemption provided in subsection E
382	382	of this section for any fiscal year. If the a mount of claims for
383	383	refunds exceed the limits provided in this paragraph, the Tax
384	384	Commission shall determine the percentage of the refund which
385	385	establishes the proportionate share of the refund which may be
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437	437	claimed by any taxpayer so that the maximum amoun ts authorized by
438	438	this paragraph are not exceeded.
439	439	G. On or after July 1, 2022, all persons shall only be entitled
440	440	to either the exemption granted pursuant to subsection D or E of
441	441	this section for each oil, gas, or oil and gas well drilled or
442	442	recompleted in this state. However, any person who qualifies for
443	443	the exemption granted pur suant to subsection E of this section shall
444	444	not be prohibited from qualification for the exemption granted
445	445	pursuant to subsection D of this section if the exemption granted
446	446	pursuant to subsection E of this section has expired.
447	447	H. The Tax Commission shall have the power to require any such
448	448	person engaged in mining or the production or the purchase of such
449	449	asphalt, mineral ores aforesaid, oil, or gas, or the owner of any
450	450	royalty interest therein to furnish any additional information by it
451	451	deemed to be necessary for the purpose of correctly computing the
452	452	amount of the tax; and to examine the books, records and files of
453	453	such person; and shall have power to conduct hearings and compel the
454	454	attendance of witnesses, and the production of books, records and
455	455	papers of any person.
456	456	I. Any person or any member of any firm or association, or any
457	457	officer, official, agent or employee of any corporation who shall
458	458	fail or refuse to testify; or who shall fail or refuse to produce
459	459	any books, records or papers which the Tax Com mission shall require;
460	460	or who shall fail or refuse to furnish any other evidence or
461	461
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512	512	information which the Tax Commission may require; or who shall fail
513	513	or refuse to answer any co mpetent questions which may be put to him
514	514	or her by the Tax Commission, touching the business, property,
515	515	assets or effects of any such person relating to the gross
516	516	production tax imposed by this article or exemption authorized
517	517	pursuant to this section or o ther laws, shall be guilty of a
518	518	misdemeanor, and, upon conviction thereof, sha ll be punished by a
519	519	fine of not more than Five Hundred Dollars ($500.00), or
520	520	imprisonment in the jail of the county where such offense shall have
521	521	been committed, for not more tha n one (1) year, or by both such fine
522	522	and imprisonment; and each day of such refusal on the part of such
523	523	person shall constitute a separate and distinct offense.
524	524	J. The Tax Commission shall have the power and authority to
525	525	ascertain and determine whether or not any report herein required to
526	526	be filed with it is a true and correct repo rt of the gross products,
527	527	and of the value thereof, of such person engaged in the mining or
528	528	production or purchase of asphalt and ores bearing minerals
529	529	aforesaid and of oil and g as. If any person has made an untrue or
530	530	incorrect report of the gross production or value or volume thereof,
531	531	or shall have failed or refused to make such report, the Tax
532	532	Commission shall, under the rules prescribed by it, ascertain the
533	533	correct amount of either, and compute the tax.
534	534	K. The payment of the taxes herein levied shall b e in full, and
535	535	in lieu of all taxes by the state, counties, cities, towns, school
536	536
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587	587	districts and other municipalities upon any property rights attached
588	588	to or inherent in the right to the minerals, upon producing leases
589	589	for the mining of asphalt and ores bearing lead, zinc, jack or
590	590	copper, or for oil, or for gas, upon the mineral rights and
591	591	privileges for the minerals aforesaid belonging or appertaining to
592	592	land, upon the machinery, appliances and equipment used in and
593	593	around any well producing oil, or gas, or any mine producing asphalt
594	594	or any of the mineral ores aforesaid and actually used in the
595	595	operation of such well or mine. The payment of gross production tax
596	596	shall also be in lieu of all taxes upon the oil, gas, asphalt or
597	597	ores bearing minerals hereinbefore mentioned during the tax year in
598	598	which the same is produced, and upon any investment in any of the
599	599	leases, rights, privileges, minerals or other property described
600	600	herein. Any interest in the land, other than that herein
601	601	enumerated, and oil in storage, asphalt and ores bearing minerals
602	602	hereinbefore named, mined, produced and on hand at the date as of
603	603	which property is assessed for general and ad valorem taxation for
604	604	any subsequent tax year, shall be assessed and taxed as other
605	605	property within the taxing district in which such property is
606	606	situated at the time.
607	607	L. No equipment, material or property shall be exempt from the
608	608	payment of ad valorem tax by reason of the payment of th e gross
609	609	production tax except such equipment, machinery, tools, material or
610	610	property as is actually necessary and being used and in use in the
611	611
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662	662	production of asphalt or of ores bearing lead, zinc, jack or copper
663	663	or of oil or gas. Provided, the exemption sh all include the
664	664	wellbore and non-recoverable down-hole material, including casing,
665	665	actually used in the disposal of waste materials produced with such
666	666	oil or gas. It is expressly declared that no ice plants, hospitals,
667	667	office buildings, garages, residence s, gasoline extraction or
668	668	absorption plants, water systems, fuel systems, room ing houses and
669	669	other buildings, nor any equipment or material used in connection
670	670	therewith, shall be exempt from ad valorem tax.
671	671	SECTION 2. This act shall become effective November 1, 2025.
672	672
673	673	60-1-1460 QD 12/31/2024 12:02:40 AM

Oklahoma 2025 Regular Session

Oklahoma Senate Bill SB311 Compare Versions