Okla. Admin. Code § 710:45-9-10

Current through Vol. 42, No. 7, December 16, 2024

Section 710:45-9-10 - Frac oil exclusion

(a) When load or frac oil is used in well completions (not produced from same lease) by injection into a formation for fracturing purposes, and the gross production and petroleum excise taxes have been paid on the injected load or frac oil, each barrel so injected is not considered oil produced from wells where recovered and an exclusion from gross production tax may be claimed for oil so used, as follows:

(1) The load or frac exclusion for each lease may only be recovered within one year of the date of injection into the same lease.

(2) Monthly lease load or frac oil exclusions shall not exceed monthly total lease production.

(3) Load or frac oil exclusion value, for exclusion purposes, is the lesser of the price paid for the load or frac oil or the posted field gravity price of the oil produced on the lease where recovered.

(4) Recovery of the load or frac oil exclusion must begin with the first production after injection. For any load or frac oil purchased, after date of injection and prior to receipt of Affidavit for OCC Credit and/or OTC Tax Exclusion (OTC Form 317), the taxpayer must file an amended report and request a credit memo or tax refund. After receipt of OTC Form 317, taxpayer may show load or frac oil exclusion on his monthly tax report.

(5) The producer must complete the operator's portion of the affidavit and supply the purchaser with OTC Form 317 and supporting invoices.

(6) The purchaser shall complete his portion of OTC Form 317.

(7) A notarized legible copy of OTC Form 317 must accompany each report for refund or credit memo and each monthly report that reflects a claim for load or frac oil exclusion.

(8) All load or frac oil exclusions claimed on future reports which do not comply with the provisions of this Section will be disallowed.

(b)"Lease", as used in this Section, means the Oklahoma Tax Commission production unit number assigned to the particular unit.

Okla. Admin. Code § 710:45-9-10

Amended by Oklahoma Register, Volume 41, Issue 22, August 1, 2024, eff. 11/1/2024