Oklahoma § 68-1009 - Payment of tax - Due date - Delinquent taxes - Persons

§ 68-1009. Payment of tax - Due date - Delinquent taxes - Persons

liable for tax - Election to report and pay tax - Payment upon basis

of prevailing price – Payment pursuant to contract or agreement.

A. The gross production tax on asphalt and on ores bearing

lead, zinc, jack, gold, silver or copper, and on petroleum oil, tank

bottoms, pit oil, and liquid hydrocarbons from which petroleum oil

is extracted, and on gas shall be paid on a monthly basis in

accordance with this article.

B. The gross production tax shall become due on the first day

of each calendar month on all lead, zinc, jack, gold, silver or

copper, petroleum oil, tank bottoms, pit oil, and liquid

hydrocarbons from which petroleum oil is extracted, natural gas or

casinghead gas produced in and saved during the preceding monthly

period, and, if the tax is not paid on or before the twenty-fifth

day of the second calendar month following the month of production,

the tax shall become delinquent and shall be collected in the manner

provided by law for the collection of delinquent gross production

taxes. The provisions of this subsection shall apply to payment of

gross production taxes irrespective of any other statute relating

thereto.

C. On all petroleum oil extracted from tank bottoms, pit oil,

or liquid hydrocarbons, the gross production tax shall be paid by

the operator of the reclaiming plant, unless the tax levied by this

article has already been paid thereon.

D. On oil and gas sold at the time of production, the gross

production tax shall be paid by the purchaser of such products, and

such purchaser shall, and is hereby authorized to deduct in making

settlements with the producer and/or royalty owner, the amount of

tax so paid. In the event oil is not sold at the time of production

but is retained by the producer, producers may elect to report and

pay the gross production tax on such oil in accordance with the

provisions of this section. This election shall require prior

written notice to the Oklahoma Tax Commission and producers may be

Oklahoma Statutes - Title 68. Revenue and Taxation

required to submit reports to the Commission that reconcile

production transferred off the lease. The purchaser of such oil

shall not be liable for the gross production tax and shall not be

required to obtain a purchaser’s reporting number for such oil. The

obligations outlined in this subsection shall not be controlled by

any contractual provisions between the producer and the purchaser;

provided, that in settlement with the royalty owner such producer

shall have the right to deduct the amount of such tax so paid on

royalty oil or to deduct therefrom royalty oil equivalent in value

at the time such tax becomes due with the amount of the tax paid.

The gross production tax upon asphalt, or on ores bearing lead,

zinc, jack, gold, silver or copper shall be paid by the producer for

himself or herself, including the royalty interest; provided, that

in settlement with the royalty owner such producer shall have the

right to deduct the amount of such tax so paid on royalty asphalt,

or on ores bearing lead, zinc, jack, gold, silver or copper, or to

deduct therefrom royalty asphalt, or ores bearing lead, zinc, jack,

gold, silver or copper, equivalent in value at the time such tax

became due, to the amount of tax paid.

E. 1. Producers, either as operators of producing wells or as

nonoperating working interest owners who take gas in kind at the

wellhead at the time of production, may elect to report and pay the

gross production tax on such gas in accordance with the provisions

of this section, if the first sale of such gas by the producer is to

a final consumer or user of the gas. This election shall not be

available to a producer if the first sale of such gas is to a

purchaser who is approved and bonded to remit gross production taxes

or unless prior approval of the Oklahoma Tax Commission is obtained

by the producer. This election shall not be controlled by any

contractual provisions between the producer and the purchaser. This

election shall be made only by the producer upon forms prescribed

therefor.

Upon exercise of the election to report and pay the gross

production tax by a producer, the purchaser of such gas shall not be

liable for the gross production tax and shall not be required to

obtain a purchaser’s reporting number for such gas.

2. Gas when produced and utilized in any manner, except when

used in the operation of the lease or premises in the production of

oil or gas, or for repressuring, shall be considered for the purpose

of this article, as to the amount utilized, as gas actually produced

and saved.

F. 1. In case oil or gas is sold under circumstances where the

sale price does not represent the cash price prevailing for oil or

gas of like kind, character or quality in the field from which such

product is produced, the Tax Commission may require the tax to be

paid upon the basis of the prevailing price then being paid at the

Oklahoma Statutes - Title 68. Revenue and Taxation

time of production for sales in the field for oil or gas of like

kind, quality and character and on no other basis.

2. In the case where the sale of oil or gas is between related

entities, the taxpayer shall have the burden of proving with

evidence of arm’s-length sales between unrelated parties that the

sales price represents the cash price prevailing for oil or gas of

like kind, character or quality for sales in the field from which

such product is produced. In the absence of such proof, the

prevailing price shall be presumed to be the average price of oil or

gas produced for sales in the county from which the product is

produced, as determined by the Tax Commission from monthly tax

reports filed pursuant to Section 1010 of this title. In

determining the average price, the Tax Commission shall not include

the sales of oil or gas under review and shall not include prices

from other sales that have been previously adjusted by the Tax

Commission pursuant to this subsection.

3. For the purposes of this subsection, an entity is related to

another entity if:

a.

the two entities have significant common purposes and

substantial common membership,

b.

the two entities have direct or indirect substantial

common direction or control, or

c.

either entity owns, directly or through one or more

entities, a fifty percent (50%) or greater interest in

the capital or profits of the other entity.

G. Pursuant to the provisions of a gas purchase contract or

agreement, if the first purchaser makes payments to the producer as

a result of the failure or refusal of such purchaser to take gas,

such payments, for purposes of this article, are hereby deemed to be

part of the gross value of gas taken according to such contract or

agreement. The gross production tax shall be calculated upon the

gross value, including such payments, in accordance with the

provisions of this article. Gas on which the gross production tax

has been paid in this manner when taken by the purchaser shall be

reported as gas on which the tax has been paid. If such gas, which

corresponds to such payments, is not taken but payments therefor are

retained by the producer, then such payments are hereby deemed to be

a premium on gas which was taken under such contract or agreement.

Added by Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963.

Renumbered from § 10-1009 of this title by Laws 1965, c. 215, § 2.

Amended by Laws 1968, c. 155, § 1; Laws 1979, c. 88, § 2, emerg.

eff. April 24, 1979; Laws 1983, c. 13, § 3, emerg. eff. March 23,

1983; Laws 1983, c. 275, § 6, emerg. eff. June 24, 1983; Laws 1987,

c. 203, § 142, operative July 1, 1987; Laws 1992, c. 30, § 7, emerg.

eff. March 31, 1992; Laws 2004, c. 444, § 2, eff. Nov. 1, 2004; Laws

2006, c. 134, § 3, eff. July 1, 2006; Laws 2024, c. 261, § 1, eff.

Nov. 1, 2024.

Oklahoma Statutes - Title 68. Revenue and Taxation