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Rule Title: ALLOCATION OF INCREMENTAL PRODUCTION
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Department: REVENUE, DEPARTMENT OF
Chapter: NATURAL RESOURCES TAXES
Subchapter: Oil and Gas
 
Latest version of the adopted rule presented in Administrative Rules of Montana (ARM):

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42.25.1806    ALLOCATION OF INCREMENTAL PRODUCTION

(1) If the designated area of a new or expanded enhanced recovery project has wells reported for tax purposes prior to the inception of the new or expanded enhanced recovery project, both as pre-1999 wells and as post-1999 wells, the operator must report and pay any tax due at the appropriate applicable rates on the non-incremental and incremental for pre-1999 and post-1999 wells.

(2) The amount of tax to be paid at pre-1999 and post-1999 tax rates will be based upon a production ratio determined each calendar year.

(a) The pre-1999 ratio will be computed by dividing incremental and non-incremental production for the previous calendar year from wells classified as pre-1999 wells by the total production for the previous calendar year from the designated area of the new or expanded recovery project.

(b) The post-1999 ratio will be computed by dividing incremental and non-incremental production for the previous calendar year from wells classified as post-1999 wells by the total production for the previous calendar year from the designated area of the new or expanded recovery project.

(3) Incremental production to be reported as pre-1999 wells is the amount of production computed when the pre-1999 ratio determined above is multiplied times the total incremental production for the quarter. The amount of non-incremental pre-1999 production to be reported is determined by subtracting the amount of pre-1999 incremental production from the total pre-1999 production for the project for the tax period being reported.

(4) Incremental production to be reported as post-1999 is the amount of production computed when the post-1999 ratio determined above is multiplied times the total incremental production for the quarter. The amount of non-incremental post-1999 production to be reported is determined by subtracting the amount of post-1999 incremental production from the total post-1999 production.

(5) The value for all production (incremental and non-incremental) in a project will be based upon an average price for the production sold from the project during the quarter.

History: 15-36-322, MCA; IMP, 15-36-303, 15-36-304, MCA; NEW, 1996 MAR p. 2001, Eff. 7/19/96; AMD, 2000 MAR p. 1347, Eff. 5/26/00.


 

 
MAR Notices Effective From Effective To History Notes
5/26/2000 Current History: 15-36-322, MCA; IMP, 15-36-303, 15-36-304, MCA; NEW, 1996 MAR p. 2001, Eff. 7/19/96; AMD, 2000 MAR p. 1347, Eff. 5/26/00.
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