Kansas' House Bill 2117 ("HB 2117"), recently signed by Governor Sam Brownback, repealed the state's 24-month severance tax exemption for gas wells and oil wells that produce more than 50 barrels of oil per day. Only production after June 30, 2012 is affected.
Kansas imposes an 8% tax on the gross value of oil and gas produced in the state. Under current law, a new gas or oil well is exempt from severance tax for the first 24 months of production. The well must be kept in production for at least two years from the date production begins. HB 2117 repeals the 24-month severance tax exemption for wells that begin production after June 30, 2012.
HB 2117 provides a new, limited exemption for the production of oil. The exemption applies to the production of oil from a new well that begins production on or after July 1, 2012 and produces more than 50 barrels a day. Further, the well must be in continuous production of at least 24 months. The new exemption is valid for the first 24-month period following the month in which the oil was first produced.
Other severance tax exemptions currently provided for under Kansas law are not affected by HB 2117.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you