Sales Tax Issues for Upstream Oil and Gas Operators: Smell that? That’s the smell of money!

On any windy day in the Permian Basin, Eagle Ford Shale or the Barnet shale areas, the unmistakable smell of oil and gas is clearly evident in the air.  To oil and gas producers that is the smell of money.  However, it can also signal a possible leak on a flow line, gathering line, tank battery or other lease site equipment.  When money is flowing in hand over fist, it is easy to overlook the expense side of oil production, the development of a lease, building roads, building a pad, drilling the well, casing the well and completing the well site with flow lines, processing equipment and storage tanks for produced water and oil. However, this equipment on the lease site is subject to exposure to the elements along with exposure to the corrosive nature of the produced water, oil and gas, thus requiring ongoing maintenance and detection of leaks in the wellbore, casing, flow lines, etc. (more…)

0 COMMENTS

Update to Glenn Hegar, et al v CheckFree Services Corp (RULE §3.330 – Data Processing Services)

The Texas Attorney General’s office did not appeal the decision reached by the 14th Court of Appeals in Glenn Hegar, et al v CheckFree Services Corp, therefore the decision becomes final and we now await to see how the Comptroller’s office will apply the decision to similar data processing cases pending in district court and where protective claims were filed pending the outcome of CheckFree Services. (more…)

TAGS:
0 COMMENTS

State to challenge Decision in Glenn Hegar, et al v CheckFree Services Corp

The Texas Attorney General’s office on July 20, 2016 filed its Reply Brief in Glenn Hegar, et al v CheckFree Services Corp before the 14th Court of Appeals. (more…)

0 COMMENTS

Texas Supreme Court to Hear Case on Exemption for Downhole Equipment

The Texas Supreme Court has agreed to review the appellate court decision in Southwest Royalties v. Glenn HegarComptroller of Public Accounts. The case addresses the taxability of oil and gas production equipment used below ground by upstream petroleum companies, primarily big dollar items such as casing and tubing. Southwest Royalties is arguing that the below-ground equipment used in oil and natural gas production qualifies as processing equipment under Texas Tax Code Sec. 151.318, and Comptroller Rule 3.300 – Manufacturing; Custom Manufacturing; Fabricating; Processing. (more…)

0 COMMENTS

Sales Tax and the Upstream Petroleum Industry

The upstream sector of the Petroleum industry involves companies that search for potential underground crude oil and natural gas fields, drill exploratory wells, and subsequently drill and operate the wells that recover and bring the crude oil and/or raw natural gas to the surface. Sales taxes can be a significant cost for the companies exploring, drilling and operating successful oil and gas wells. (more…)

TAGS:
0 COMMENTS

Sales Tax and Midstream Oil and Gas Companies

Companies involved in the midstream movement of oil and gas from the well sites to the processing or downstream refineries generally utilize pipelines, tanker trucks, barges, rail or oil tankers.

In Texas oil and gas is primarily moved by pipeline. Texas has over 425,000 miles of pipelines within its borders that represent about 1/6 of the total pipeline structure in the United States. The Pipeline safety department of the Texas Railroad Commission is charged with the responsibility of enforcing compliance with federal and state laws and regulation by the more than 1,485 pipeline operators in Texas of intrastate gathering, transmission, distribution and master-metered systems. (more…)

TAGS:
0 COMMENTS