{"data":{"id":"us-ok/okla.-stat.-tit.-68-68-1001","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 68, § 68-1001","heading":"Gross production tax on asphalt, ores, oil and gas, and","body":"royalty interests - Exemptions.\n\nA. There is hereby levied upon the production of asphalt, ores\n\nbearing lead, zinc, jack and copper a tax equal to three-fourths of\n\none percent (3/4 of 1%) on the gross value thereof.\n\nB. On or after the effective date of this act and except as\n\nprovided by paragraph 4 of this subsection, there shall be levied a\n\ntax on the gross value of the production of oil and gas as follows:\n\n1. Upon the production of oil a tax equal to seven percent (7%)\n\nof the gross value of the production of oil based on a per barrel\n\nmeasurement of forty-two (42) U.S. gallons of two hundred thirty-one\n\n(231) cubic inches per gallon, computed at a temperature of sixty\n\n(60) degrees Fahrenheit;\n\n2. Upon the production of gas a tax equal to seven percent (7%)\n\nof the gross value of the production of gas;\n\n3. Notwithstanding the levies in paragraphs 1 and 2 of this\n\nsubsection, the production of oil, gas, or oil and gas from wells\n\nspudded prior to the effective date of this act, and on or after the\n\neffective date of this act, shall be taxed at a rate of five percent\n\n(5%) commencing with the month of first production for a period of\n\nthirty-six (36) months. Thereafter, the production shall be taxed\n\nas provided in paragraphs 1 and 2 of this subsection; and\n\n4. If the provisions of Article XIII-C of the Oklahoma\n\nConstitution are approved by the people pursuant to adoption of\n\nState Question No. 795, the rate of gross production tax imposed by\n\nparagraph 3 of this subsection shall be reduced to two percent (2%)\n\nfor the first thirty-six (36) months of production and thereafter\n\nthe rate of taxation shall be seven percent (7%).\n\nC. The taxes hereby levied shall also attach to, and are levied\n\non, what is known as the royalty interest, and the amount of such\n\ntax shall be a lien on such interest.\n\nD. 1. Except as otherwise provided in this section, for\n\nsecondary and tertiary recovery projects approved or having an\n\ninitial project start date on or after July 1, 2022, all production\n\nwhich results from such secondary and tertiary recovery projects\n\nshall be exempt from the gross production tax levied pursuant to\n\nthis section for a period not to exceed five (5) years from the\n\ninitial project start date or for a period ending upon the\n\ntermination of the secondary and tertiary recovery process,\n\nwhichever occurs first.\n\n2. For purposes of this subsection, \"project start date\" means\n\nthe date on which the injection of liquids, gases, or other matter\n\nbegins on an enhanced recovery project.\n\n3. For new secondary and tertiary recovery projects approved by\n\nthe Oklahoma Corporation Commission on or after July 1, 2022, such\n\napproval shall constitute qualification for an exemption.\n\n4. For all production exempted pursuant to this subsection, a\n\nrefund against gross production taxes shall be issued as provided in\n\nsubsection F of this section.\n\n5. Except as otherwise provided in this section, any production\n\nwhich results from a recovery project from a well on the Corporation\n\nCommission's orphaned well list shall receive a fifty-percent\n\nreduction from the gross production tax levied pursuant to paragraph\n\n3 of subsection B of this section from the project beginning date\n\nfor a period of thirty-six (36) months, after which the rate shall\n\nincrease to the full rate of tax prescribed by paragraph 3 of\n\nsubsection B of this section. Furthermore, before any production\n\nfrom a recovery project under this paragraph occurs the producer\n\noverseeing the project shall file a corporate surety bond, letter of\n\ncredit from a banking institution, cash, or a certificate of deposit\n\nwith the Secretary of State in the sum of Twenty-five Thousand\n\nDollars ($25,000.00), per well transferred from the Corporation\n\nCommission's orphaned well list, conditioned upon recovery under\n\nthis project for thirty-six (36) months. The Secretary of State\noverseeing the project shall file a corporate surety bond, letter of\n\ncredit from a banking institution, cash, or a certificate of deposit\n\nwith the Secretary of State in the sum of Twenty-five Thousand\n\nDollars ($25,000.00), per well transferred from the Corporation\n\nCommission's orphaned well list, conditioned upon recovery under\n\nthis project for thirty-six (36) months. The Secretary of State\n\nshall hold such corporate surety bond, letter of credit from a\n\nbanking institution, cash, or certificate of deposit for the benefit\n\nof the Corporation Commission Plugging Fund if such well is\n\nabandoned by the producer and returns to the Corporation\n\nCommission's orphaned well list.\n\nE. Except as otherwise provided by this section, the production\n\nof oil, gas, or oil and gas from wells drilled but not completed as\n\nof July 1, 2021, which are completed with the use of recycled water\n\non or after July 1, 2022, shall earn an exemption from the gross\n\nproduction tax levied from the date of first sales for a period of\n\ntwenty-four (24) months. The exemption provided in this subsection\n\nshall be proportional to the percentage of the total amount of water\n\nused to complete the well that is recycled water. For all\n\nproduction exempted pursuant to this subsection, a refund against\n\ngross production taxes shall be issued as provided in subsection F\n\nof this section. For purposes of this subsection, \"recycled water\"\n\nmeans oil and gas produced water and waste that has been\n\nreconditioned or treated by mechanical or chemical processes into a\n\nreusable form.\n\nF. On or after July 1, 2022, for all oil and gas production\n\nexempt from gross production taxes pursuant to subsections D and E\n\nof this section during a given fiscal year, a refund of gross\n\nproduction taxes shall be issued to the well operator or a designee\n\nin the amount of such exempted gross production taxes paid during\n\nsuch period, subject to the following provisions:\n\n1. A refund shall not be claimed until after the end of the\n\nfiscal year. As used in this subsection, a fiscal year shall be\n\ndeemed to begin on July 1 of one calendar year and shall end on June\n\n30 of the subsequent calendar year;\n\n2. Unless otherwise specified, no claims for refunds pursuant\n\nto the provisions of this subsection shall be filed more than\n\neighteen (18) months after the first day of the fiscal year in which\n\nthe refund is first available;\n\n3. Any person claiming a refund pursuant to the exemption\n\nprovided in subsections D and E of this section shall file an\n\napplication with the Tax Commission which, upon determination of\n\nqualification by the Corporation Commission, shall approve the\n\napplication for such exemption;\n\n4. The Tax Commission may require any person claiming a refund\n\npursuant to the exemptions provided in subsections D and E of this\n\nsection to furnish information or records concerning the exemption\n\nas is deemed necessary by the Tax Commission;\n\n5. No claims for refunds pursuant to the provisions of this\n\nsubsection shall be filed by or on behalf of persons other than the\n\noperator or a working interest owner of record at the time of\n\nproduction;\n\n6. No entity, including subsidiaries of the entity, shall be\n\nauthorized to receive refunds claimed pursuant to the exemption\n\nprovided in subsection D of this section that exceed twenty percent\n\n(20%) of the limitation provided in paragraph 7 of this subsection;\n\nand\n\n7. The total amount of refunds authorized shall not exceed\n\nFifteen Million Dollars ($15,000,000.00) pursuant to the exemption\n\nprovided in subsection D of this section and Ten Million Dollars\n\n($10,000,000.00) pursuant to the exemption provided in subsection E\n\nof this section for any fiscal year. If the amount of claims for\n\nrefunds exceed the limits provided in this paragraph, the Tax\n\nCommission shall determine the percentage of the refund which\n\nestablishes the proportionate share of the refund which may be\nexemption\n\nprovided in subsection D of this section and Ten Million Dollars\n\n($10,000,000.00) pursuant to the exemption provided in subsection E\n\nof this section for any fiscal year. If the amount of claims for\n\nrefunds exceed the limits provided in this paragraph, the Tax\n\nCommission shall determine the percentage of the refund which\n\nestablishes the proportionate share of the refund which may be\n\nclaimed by any taxpayer so that the maximum amounts authorized by\n\nthis paragraph are not exceeded.\n\nG. On or after July 1, 2022, all persons shall only be entitled\n\nto either the exemption granted pursuant to subsection D or E of\n\nthis section for each oil, gas, or oil and gas well drilled or\n\nrecompleted in this state. However, any person who qualifies for\n\nthe exemption granted pursuant to subsection E of this section shall\n\nnot be prohibited from qualification for the exemption granted\n\npursuant to subsection D of this section if the exemption granted\n\npursuant to subsection E of this section has expired.\n\nH. The Tax Commission shall have the power to require any such\n\nperson engaged in mining or the production or the purchase of such\n\nasphalt, mineral ores aforesaid, oil, or gas, or the owner of any\n\nroyalty interest therein to furnish any additional information by it\n\ndeemed to be necessary for the purpose of correctly computing the\n\namount of the tax; and to examine the books, records and files of\n\nsuch person; and shall have power to conduct hearings and compel the\n\nattendance of witnesses, and the production of books, records and\n\npapers of any person.\n\nI. Any person or any member of any firm or association, or any\n\nofficer, official, agent or employee of any corporation who shall\n\nfail or refuse to testify; or who shall fail or refuse to produce\n\nany books, records or papers which the Tax Commission shall require;\n\nor who shall fail or refuse to furnish any other evidence or\n\ninformation which the Tax Commission may require; or who shall fail\n\nor refuse to answer any competent questions which may be put to him\n\nor her by the Tax Commission, touching the business, property,\n\nassets or effects of any such person relating to the gross\n\nproduction tax imposed by this article or exemption authorized\n\npursuant to this section or other laws, shall be guilty of a\n\nmisdemeanor, and, upon conviction thereof, shall be punished by a\n\nfine of not more than Five Hundred Dollars ($500.00), or\n\nimprisonment in the jail of the county where such offense shall have\n\nbeen committed, for not more than one (1) year, or by both such fine\n\nand imprisonment; and each day of such refusal on the part of such\n\nperson shall constitute a separate and distinct offense.\n\nJ. The Tax Commission shall have the power and authority to\n\nascertain and determine whether or not any report herein required to\n\nbe filed with it is a true and correct report of the gross products,\n\nand of the value thereof, of such person engaged in the mining or\n\nproduction or purchase of asphalt and ores bearing minerals\n\naforesaid and of oil and gas. If any person has made an untrue or\n\nincorrect report of the gross production or value or volume thereof,\n\nor shall have failed or refused to make such report, the Tax\n\nCommission shall, under the rules prescribed by it, ascertain the\n\ncorrect amount of either, and compute the tax.\n\nK. The payment of the taxes herein levied shall be in full, and\n\nin lieu of all taxes by the state, counties, cities, towns, school\n\ndistricts and other municipalities upon any property rights attached\n\nto or inherent in the right to the minerals, upon producing leases\n\nfor the mining of asphalt and ores bearing lead, zinc, jack or\n\ncopper, or for oil, or for gas, upon the mineral rights and\n\nprivileges for the minerals aforesaid belonging or appertaining to\n\nland, upon the machinery, appliances and equipment used in and\n\naround any well producing oil, or gas, or any mine producing asphalt\nached\n\nto or inherent in the right to the minerals, upon producing leases\n\nfor the mining of asphalt and ores bearing lead, zinc, jack or\n\ncopper, or for oil, or for gas, upon the mineral rights and\n\nprivileges for the minerals aforesaid belonging or appertaining to\n\nland, upon the machinery, appliances and equipment used in and\n\naround any well producing oil, or gas, or any mine producing asphalt\n\nor any of the mineral ores aforesaid and actually used in the\n\noperation of such well or mine. The payment of gross production tax\n\nshall also be in lieu of all taxes upon the oil, gas, asphalt or\n\nores bearing minerals hereinbefore mentioned during the tax year in\n\nwhich the same is produced, and upon any investment in any of the\n\nleases, rights, privileges, minerals or other property described\n\nherein. Any interest in the land, other than that herein\n\nenumerated, and oil in storage, asphalt and ores bearing minerals\n\nhereinbefore named, mined, produced and on hand at the date as of\n\nwhich property is assessed for general and ad valorem taxation for\n\nany subsequent tax year, shall be assessed and taxed as other\n\nproperty within the taxing district in which such property is\n\nsituated at the time.\n\nL. No equipment, material or property shall be exempt from the\n\npayment of ad valorem tax by reason of the payment of the gross\n\nproduction tax except such equipment, machinery, tools, material or\n\nproperty as is actually necessary and being used and in use in the\n\nproduction of asphalt or of ores bearing lead, zinc, jack or copper\n\nor of oil or gas. Provided, the exemption shall include the\n\nwellbore and non-recoverable down-hole material, including casing,\n\nactually used in the disposal of waste materials produced with such\n\noil or gas. It is expressly declared that no ice plants, hospitals,\n\noffice buildings, garages, residences, gasoline extraction or\n\nabsorption plants, water systems, fuel systems, rooming houses and\n\nother buildings, nor any equipment or material used in connection\n\ntherewith, shall be exempt from ad valorem tax.","path":["OK Code","Title 68"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os68.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"92fff57d845aefbdb1b953bc6cf53364c208d45b675d46bd027c7674c6b3d8ba","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-67-67-95","next":"us-ok/okla.-stat.-tit.-68-68-1001.1"},"notice":"GroundRules: Original legal text. Not legal advice."}