Natural Gas Tax
Estimating Tax Rate for Certain High Cost Gas (HCG)
This Web page is designed to help you estimate the reduced tax rate for wells spudded or completed after August 31, 1996. HCG leases may qualify for a reduced natural gas severance tax rate if the producer:
- obtains certification for the lease as a HCG lease from the Texas Railroad Commission and
- completes a Texas Request for Approval of High Cost Gas Exemption or Reduced Tax Rate (form number AP-180).
The Texas Request for Approval of High Cost Gas Exemption or Reduced Tax Rate, AP-180, must be filed with the Comptroller by the later of these dates: either the 180th day after the date of first production or the 45th day after the Railroad Commission approval date. If the application is not filed by the applicable deadline, the tax exemption or tax deduction is reduced by 10 percent for the period beginning on the 180th day after the first day of production and ending on the date on which the application is filed with the Comptroller.
The reduced tax rate formula is used to determine the tax rate for approved wells completed during the state fiscal year. The Comptroller uses a formula that calculates the reduced tax rate for the current fiscal year by using the preceding fiscal year's drilling and completion cost median. The fiscal year begins on the first of September and ends the last day of August. Enter the following information to get an estimate for certified HCG leases:
Form:Texas Request for Approval of High Cost Gas Exemption or Reduced Tax Rate (form number AP-180) is available for downloading in PDF format.
If you do not already have Adobe Acrobat Reader, you will need to download the latest version to view and print this form.