Texas Administrative Code
Title 34 - PUBLIC FINANCE
Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS
Chapter 3 - TAX ADMINISTRATION
Subchapter C - CRUDE OIL PRODUCTION TAX
Section 3.35 - Reporting Requirements for Producers and Purchasers

Universal Citation: 34 TX Admin Code § 3.35

Current through Reg. 50, No. 13; March 28, 2025

(a) The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) First Purchaser--The first person purchasing crude oil directly from the operator or producer.

(2) Operator--The person responsible for the actual physical operation of the producing property.

(3) Producer--Any interest owner in the producing property, including a royalty interest owner.

(b) The first purchaser must remit the tax due on all oil purchased from operators or producers when delivery is made on the lease, unless the comptroller has given another person written authorization to remit tax. The operator or producer must remit the tax on all other oil removed from the lease. Upon written request of an agreement by the operator and all producers and purchasers involved, the comptroller may authorize a producer or a subsequent purchaser to report and remit the tax. The authorization will be for the purpose of reporting and remitting tax only, and failure of the authorized party to pay the tax will not relieve the producer, first purchaser, or any subsequent purchaser of liability for the tax.

(c) Any oil used, lost, stolen, or otherwise unaccounted for after it has been produced and measured must be reported, and the tax must be paid by the operator on the Crude Oil Special Tax Report, unless the operator is required to file the Crude Oil Producer's Monthly Tax Report.

(d) The operator is responsible for reporting, or accounting for, all of the production from the property unless written exception is granted by the comptroller. Written exception will be granted whenever a producer has elected to take in-kind. The producer will then have the same reporting responsibilities as an operator for the production taken in-kind.

(e) A first purchaser may not take delivery of crude oil from an operator or producer unless the operator or producer furnishes the purchaser with a taxpayer identification number assigned by the comptroller. A first purchaser failing to secure the producer's taxpayer number, either from the producer or the comptroller, will be liable for any tax, penalty, and interest due on the oil purchased from the producer or operator.

(f) There are exempt from the taxes imposed by the Texas Limited Sales, Excise and Use Tax Act the receipts from the sale, use, or other consumption of oil when such oil is in the exact physical form as taxed under the Tax Code, Chapter 202, Title 2. Any change in the said physical form shall cancel the exemption provided therein and cause the sale, use, or other consumption to be taxable.

(g) Due dates for returns are as specified in this subsection.

(1) The Crude Oil Producer's Monthly Tax Report, the Crude Oil Purchaser's Monthly Tax Report, the Crude Oil Special Tax Report, and the tax payment are due on or before the 25th day of each month covering the previous month's transactions.

(2) The Crude Oil Producer's Annual Report due prior to December 31, 1993, is due. The Crude Oil Producer's Annual Report due after December 31, 1993, is not required. A producer who is not required to file a report after December 31, 1993, and who ceases to operate crude oil producing properties must notify the comptroller's office on or before the 25th day of the month following the month that the producer ceased doing business.

(h) All first purchasers of crude oil must file the Crude Oil Purchaser's Monthly Tax Report.

(i) All operators or producers authorized to remit and responsible for remitting tax, other than the operators authorized under subsection (c) of this section, must file the Crude Oil Producer's Monthly Tax Report.

(j) All operators or producers must file the Texas Tax Questionnaire to obtain a taxpayer number.

(k) Beginning with the January 1999 production period, crude oil production will be reported at the lease level on all crude oil reports. The following information must be reported on the crude oil reports:

(1) the Crude Oil Purchaser's Monthly Tax Report:
(A) the name and taxpayer number of each operator or producer from whom crude oil was purchased during the month; and

(B) the volume and value of oil purchased from each operator or producer on each lease; except

(C) oil produced and purchased by the same taxpayer must be reported only on the Crude Oil Producer's Monthly Tax Report.

(2) the Crude Oil Producer's Monthly Tax Report:
(A) the name and taxpayer number of the purchaser of oil being sold at the lease; and

(B) the volume and value of oil used, lost, stolen, or removed from leases by the operator or producer on each lease; and

(3) the Crude Oil Special Tax Report. The volume and value of all oil lost, used, stolen, or otherwise unaccounted for on each lease (to be used by producers who are not required to file reports under subsection (i) of this section).

(l) Crude oil operators or producers who are not required to file reports under this section must keep the following records:

(1) the name and taxpayer number of each purchaser taking delivery of oil at the lease from the operator or producer during the previous calendar year; and

(2) the total volume and value of the oil delivered to each purchaser.

Disclaimer: These regulations may not be the most recent version. Texas may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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