What is the severance tax rate for natural gas?
LA R.S. 47:633(9) provides that the tax rate for natural gas and equivalent gas volumes of natural gasoline, casinghead gasoline, and other natural gas liquids including ethane, methane, butane or propane is per 1,000 cubic feet at a base pressure of 15.025 pounds per square inch absolute and at 60 degrees Fahrenheit is adjusted annually on July 1 and may never be less than 7 cents.
The tax rates for the last five fiscal years are as follows:
- Full Rate : Per MCF
- 7/19 through 6/20 : $.125
- 7/20 through 6/21 : $.0934
- 7/21 through 6/22 : $.091
- 7/22 through 6/23 : $.177
- 7/23 through 6/24 : $.251
- Incapable oil well gas : $.03
- Incapable gas well gas : $.013
- Half Rate – Inactive gas : Per MCF
- 7/19 through 6/20 : $.0625
- 7/20 through 6/21 : $.0467
- 7/21 through 6/22 : $.0455
- 7/22 through 6/23 : $.0885
- 7/23 through 6/24 : $.1255
- Quarter Rate – Orphan Gas : Per MCF
- 7/19 through 6/20 : $.03125
- 7/20 through 6/21 : $.02335
- 7/21 through 6/22 : $.02275
- 7/22 through 6/23 : $.04425
- 7/23 through 6/24 : $.06275
- Horizontal Rate : Per MCF
- 7/22 through 6/23 : $.0354
- 7/23 through 6/24 : $.0502
LA R.S. 47:633(7)(d)(ii) provides that the Secretary shall determine the natural gas price upon which the exemption for a horizontal well that produces natural gas be based on July First of each year for the ensuing twelve months based upon the average New York Mercantile Exchange Price per million BTU per month on the close of business June Thirtieth for the prior twelve months. The amount of the exemption for a horizontal well that produces natural gas shall be as follows:
- The exemption shall be 100% if the price of natural gas is at or below $4.50 per million BTU.
- The exemption shall be 80% if the price of natural gas is above $4.50 per million BTU and at or below $5.50 per million BTU.
- The exemption shall be 60% if the price of natural gas is above $5.50 million BTU and at or below $6.00 per million BTU.
- The exemption shall be 40% if the price of natural gas is above $6.00 and at or below $6.50 per million BTU.
- The exemption shall be 20% if the price of natural gas is above $6.50 and at or below $7.00 per million BTU.
- There shall be no exemption in effect if the price of natural gas exceeds $7.00 per million BTU.