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Gross Production Monthly Rate

Oklahoma’s Gross Production Severance Tax is a variable rate tax based on an average calendar months price of crude oil and natural gas as determined by the Oklahoma Tax Commission. The average price for each production month shall determine the gross production tax rate for the following third month’s production. As an example:

January’s average price determines the GP tax rate for April. The gross production report and payment for the month of April shall be made by June 25. 

The tax rates are as follows:

Oil...

The Gross Production Tax rate on oil is:

• If the statewide average price of Oklahoma oil equals or exceeds Seventeen Dollars ($17.00) per barrel, the tax shall be seven percent (7%).

• If the statewide average price of Oklahoma oil is less than Seventeen Dollars ($17.00) but is equal to or exceeds Fourteen Dollars ($14.00) per barrel, then the tax shall be four percent (4%).

• If the statewide average price of Oklahoma oil is less than Fourteen Dollars ($14.00) per barrel, then the tax shall be one percent (1%).

Gas...

The Gross Production Tax rate on gas is as follows:

• If the statewide average price of Oklahoma gas equals or exceeds Two Dollars and Ten Cents ($2.10) per mcf, the tax shall be seven percent (7%).

• If the statewide average price of Oklahoma gas is less than Two Dollars and Ten Cents ($2.10) but is equal to or exceeds One Dollar and Seventy Five Cents ($1.75) per mcf, then the tax shall be four percent (4%).

• If the statewide average price of Oklahoma gas is less than One Dollar and Seventy-Five Cents ($1.75) per mcf, then the tax shall be one percent (1%).

In the event the average price of oil and or gas necessitates a reduction of the Gross Production Tax rate the Tax Commission shall post a notice on this web page with specific details as to what production months are affected and the appropriate rate.

An excise tax (petroleum excise tax) is also due on all oil and gas products produced in Oklahoma. The PE tax rate is 0.095 percent (multiply 0.00095) of the same taxable value used to compute the Gross Production Tax.

 

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Last Modified 6/5/2012

 

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