Frequently Asked Questions About Mineral Severance Tax
Yes, postmark dates will be relied upon in making determinations of whether filings and payments are timely.
Will adjustments be allowed to be made to taxable value for oil and condensate transportation costs and for gas gathering, dehydration, sweetening and compression costs?
Is the Mineral Severance Tax Due on production from a lease prior to removal from the lease or production unit?
Is the Minerals Severance Tax on processed gas, based on sales value of residue gas plus full value of natural gas liquids recovered by the gas plant?
If individual well meters are utilized in measuring gas on a multiple well lease, is the $87/day exemption calculated on each well or the average of all wells?
The exemption is calculated for each individual well. Refer to K.S.A 79-4217 (1) (b). See http://www.kslegislature.org/li/statute/.
Note: Allocation for each well is required when reporting the same lease code. This can be done by reporting each well with a separate line on the report, identifying each well by name or by submitting support that shows allocation by well for the lease each month.
If a central meter is utilized for measuring the total production from a multiple well lease, is the calculation based on the average well value?
What kinds of notification will the purchaser need to receive from the operator should the operator wish to report the tax?
Prior to July 1, 2012, all operators who have wells producing from a new pool, as determined by the state corporation commission, can claim a new pool exemption. A new pool exemption is effective for a period of 24 calendar months following the month in which oil or gas was first commercially produced from such pool, plus the fraction of the month in which oil or gas was first produced. If an operator completes a well that produces from a new pool for which another operator has already obtained an exemption certificate, the new operator's exemption will expire at the same time as the initial exemption granted for the new pool.
During the 2012 Legislative Session House Bill 2117 was passed and signed into law. Section 29 of the Bill amends K.S.A. 79-4217 so that, on and after July 1, 2012, the 24 month exemption for all new gas pools is eliminated, regardless of the amount of gas produced. There is a 24 month exemption for new oil pools, but only if oil production from the pool does not exceed 50 barrels, per well per day. See Notice 12-02.
Is there any liability on the purchaser if they do not withhold or refuses to withhold the tax because of lack of information or other reasons?
In the case of an oil well, can missed production days be considered in computing average daily production if the oil well subsequently makes up the production?
Can working interest holders who elect to take their portion of oil or gas production, remit mineral severance tax directly to the Kansas Department of Revenue?
How is the average daily production of a gas well, during a calendar month, calculated in determining whether or not the well qualifies for an exemption from the severance tax on gas?
The average daily production of a gas well for a calendar month is calculated as follows: Gross value of production from the gas well in the applicable month divided by Number of well producing days in the month.
The number of well producing days is determined as follows: Number of well operating (producing or flow) hours in the month divided by 24.
Neither gross value nor the well operating hours should include data from days during the month when there has been a significant disruption of production as defined in K.S.A. 79-4216(m). See http://www.kslegislature.org/li/statute/.
- County Name
- Legal Description (Section, Township, and Range)
- Current Operator
- Current first purchaser
- Well Name
- Date of First Production
- Depth of Well
- Commodity Type, Oil or Gas
- API Number (Assigned by the Kansas Corporation Commission)
Yes. To register for the electronic funds transfer program with ACH credit payments: Complete the EF-101 form on our Kansas Customer Service Center website at https://www.kdor.ks.gov/Apps/kcsc/login.aspx. For further information, go to the electronic services page.
Should you have any additional questions, call our Electronic Services staff at 785-296-6993.