Appendix E
Louisiana Oil Severance Tax Rates
Louisiana Natural Gas Severance Tax Rates
Louisiana Non-Hydrocarbon Severance Tax Rates

Louisiana oil severance tax rates

(See Appendix D for severance tax exemptions.)

a) Full Rate.

12-1/2 % of its value at the time and place of severance.

b) Incapable Oil Rate.

6-1/4 % of its value. Oil produced from a well that is incapable of producing an average of more than twenty-five barrels of oil per day during the entire taxable month, and which also produces at least fifty percent salt water per day. On multiple well leases all wells must meet the criteria to be able to qualify for the exemption.

c) Stripper Oil Rate.

3-1/8 % of its value. Oil produced from a well that is incapable of producing an average of more than ten barrels of oil per day during the entire taxable month.

d) Reclaimed Oil Rate.

3-1/8 % of its value. Reclaimed oil which has been reclaimed by class one salvage crude reclamation facilities which are permitted by the Office of Conservation - 3-1/8% of value received for the first purchase. Any person or affiliate of a person engaged in severing oil, gas or other natural resources, or operating oil or gas property, or other property from which natural resources are severed, shall not be eligible for the reduced tax rate.

NATURAL GAS TAX RATES

(See Appendix D for severance tax exemptions.)

a) Full Rate.

Natural gas severance tax rate has changed numerous times since it was first instituted. Act 387 of 1990 amended R.S. 47:633 to change the base severance tax on natural gas to $0.10 per MCF effective July 1, 1990, to be adjusted annually thereafter by a gas base rate adjustment. Act 387 further stipulated that the base rate of $0.10 per MCF would be in effect until June 30, 1992. Effective July 1, 1992 the base rate decreased to $0.07 per MCF, subject to the annual rate adjustment. The Act also provides that the tax rate shall never be less than $0.07 per MCF.

The following is a list of historical severance full tax rates since FY89/90.

R.S. 47:633(9)(d)(i) directs the secretary of the Department of Natural Resources to determine the gas base rate adjustment for the 12-month period beginning July 1 of each year as follows:

The gas base rate adjustment for the applicable 12-month period is a fraction, the numerator of which shall be the average of the monthly spot market price of gas fuels delivered into the pipelines in Louisiana as reported by the Natural Gas Clearinghouse for the previous 12-month period ending on March 31, and the denominator of which shall be the average of the monthly spot market price of gas fuels delivered into the pipelines in Louisiana as reported by the Natural Gas Clearinghouse for the 12-month period ending March 31, 1990.

This gas base rate adjustment is then to be used by the secretary of the Department of Revenue and Taxation to adjust the annual gas tax rate for the next fiscal year beginning on July 1 by multiplying the base tax rate by the gas base rate adjustment.

b) Incapable Oil Well Gas.

3 cents per MCF for gas produced from an oil well, which has a wellhead pressure of fifty pounds per square inch gauge or less under operating conditions. To qualify for the reduced rate an oil well must have a casinghead pressure of fifty pounds or less per square inch for the entire taxable month.

c) Incapable Gas Well Gas.

1-3/10 cents per MCF for gas produced from a gas well, which is incapable of producing an average of 250,000 cubic feet of gas per day. To qualify for the reduced rate a gas well must be incapable of producing 250,000 cubic feet of gas per day during the entire taxable month.

d) Contract Rate.

Gas sold under a written agreement requiring seller to pay tax without any reimbursement or with less than fifty percent reimbursement:

• 3 cents per MCF for gas sold under a contract, in existence prior to May 1, 1972, at a price less than the Federal Power Commission (FPC) authorized area rate, which requires the seller to pay and bear all of the severance tax without reimbursement of any portion of it.
• 4 cents per MCF for gas sold at a rate less than that authorized as the area ceiling ordered by the FPC in opinion nos. 598 and 607, under contracts in existence prior to November 25, 1973, which require the seller to pay and bear more than fifty percent of any increase in severance tax.
• Not to exceed 7 cents per MCF for gas sold at a rate less than fifty-two cents per MCF under contract prior to July 1, 1970. This rate is effective for the duration of the contract, whether or not such contract has been amended or supplemented subsequent to July 1, 1970, provided that the gas is sold for less than the prices previously specified.

NON-HYDROCARBON MINERALS TAX RATES

The severance tax rates for these minerals are as follows:

a) Coal	Ten cents per ton of two thousand pounds.
b) Lignite	Twelve cents per ton of two thousand pounds.
c) Ores	Ten cents per ton of two thousand pounds.
d) Salt	Six cents per ton of two thousand pounds.
e) Sulphur	One dollar and three cents per long ton of two thousand, two hundred forty pounds.

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