34 TAC §3.18
The Comptroller of Public Accounts proposes an amendment
to §3.18, concerning tax reimbursement. The proposed amendment adds definitions,
eliminates outdated provisions, clarifies tax reimbursement is not included
in the tax base, and establishes requirements for taxpayers to prove the existence
of tax reimbursement.
James LeBas, Chief Revenue Estimator, has determined that for the first
five-year period the rule will be in effect there will be no significant revenue
impact on the state or local government.
Mr. LeBas also has determined that for each year of the first five years
the rule is in effect the public benefit anticipated as a result of enforcing
the rule will be in providing new information regarding tax responsibilities.
This rule is adopted under the Tax Code, Title 2, and does not require a statement
of fiscal implications for small businesses. There is no significant anticipated
economic cost to individuals who are required to comply with the proposed
rule.
Comments on the proposal may be submitted to Bryant K. Lomax, Manager,
Tax Policy Division, P.O. Box 13528, Austin, Texas 78711.
This amendment is proposed under Tax Code, §111.002, which
provides the comptroller with the authority to prescribe, adopt, and enforce
rules relating to the administration and enforcement of the provisions of
Tax Code, Title 2.
The amendment implements Tax Code 201.102.
§3.18.Tax Reimbursement[ Included in Department of Energy Rates ].
(a)
Definitions.
(1)
Contract--A signed written agreement between two parties
for the sale and purchase of natural gas.
(2)
Tax Reimbursement--A payment that a purchaser of gas makes
to a producer for the purpose of reimbursing the producer for Texas severance
taxes that are due under Tax Code, Chapter 201.
[
(a)
Tax reimbursement collected
by gas producers under rates prescribed by the U. S. Department of Energy
as a result of the Natural Gas Policy Act of 1978 shall not be considered
a part of the producer's gross cash receipts subject to the Texas gas occupation
tax and should not be included on either the producer's or the purchaser's
tax reports.]
(b)
If gas is sold for cash only, then tax shall be computed
on the producer's gross cash receipts. If a purchaser reimburses a producer
for severance tax, then the reimbursement is not part of the producer's gross
cash receipts and is not subject to severance tax.
[
The maximum
lawful price of "certain Permian Basin" gas as defined by the Federal Energy
Regulatory Commission Regulation, Chapter I, Subchapter H, (271)(K) (December
1, 1978), shall be deemed to include tax reimbursements of 2.6 cents per mcf
for large producers and 3.05 cents per mcf for small producers whenever the
taxable value equals or exceeds 34.7 cents for large producers and 4.07 cents
for small producers. These tax reimbursements and any reimbursement in excess
of these amounts are not a part of the producer's gross cash receipts subject
to the Texas gas occupation tax and should not be included on either the producer's
or purchaser's tax reports.
]
(c)
Requirements to Establish Tax Reimbursement
[
Whenever the taxable value is less than 34.7 cents for large producers and
40.7 cents for small producers, taxable value shall be determined in the following
manner: Taxable value equals T minus C divided by 1.075, where T equals total
rate being received and C equals marketing costs being deducted for tax purposes.
]
(1)
The amount of the tax reimbursement
must be separately stated in the contract, check stub, and/or purchaser statement.
For example, the contract might specifically state a price per MCF or MMBTU
to be paid to the producer by the purchaser for the gas and state an additional
amount to be paid per MCF or MMBTU for severance tax reimbursement; or
(2)
A written contract between the parties
must contain an express statement that the payment that the purchaser made
includes severance tax reimbursement to the producer for tax that is due on
the gas. Contracts or other documents that merely state that "all taxes" are
included are not specific enough to establish that the purchaser has made
a severance tax reimbursement. The total amount that is shown on such documents
will be presumed to be the producer's gross receipts without tax reimbursement.
Either party may overcome the presumption by using the purchaser's records
to show that severance tax reimbursement was included in the total payment
that was made to the producer. When the total price that the purchaser paid
to the producer includes severance tax reimbursement, the taxable value for
that gas is computed by dividing the sum of one plus the tax rate into the
sum of the total receipts minus marketing costs.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on January 16, 2002.
TRD-200200214
Martin Cherry
Deputy General Counsel for Taxation
Comptroller of Public Accounts
Earliest possible date of adoption: March 3, 2002
For further information, please call: (512) 475-0387
Subchapter L. MOTOR FUEL TAX
34 TAC §3.201
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Comptroller of Public Accounts or in the Texas Register office, Room
245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Comptroller of Public Accounts proposes the
repeal of §3.201, concerning motor fuel testing fee. This rule is being
repealed because the authority for the administration and collection of the
motor fuel testing fee was transferred to the Texas Department of Agriculture,
effective May 22, 2001.
James LeBas, Chief Revenue Estimator, has determined that repeal of the
rule will not result in any fiscal implications to the state or to units of
local government.
Mr. LeBas also has determined that there will be no cost or benefit to
the public from the repeal of this rule. This repeal is adopted under the
Tax Code, Title 2, and does not require a statement of fiscal implications
for small businesses. There are no additional costs to persons who are required
to comply with the repeal.
Comments on the repeal may be submitted to Bryant K. Lomax, Manager, Tax
Policy Division, P.O. Box 13528, Austin, Texas 78711.
This repeal is proposed under the Tax Code, §111.002, which
provides the comptroller with the authority to prescribe, adopt, and enforce
rules relating to the administration and enforcement of the provisions of
the Tax Code, Title 2.
The repeal implements Texas Civil Statutes, Title 132, Art. 8614 §9(b).
§3.201.Motor Fuel Testing Fee.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on January 17, 2002.
TRD-200200239
Martin Cherry
Deputy General Counsel for Tax Policy and Agency Affairs
Comptroller of Public Accounts
Earliest possible date of adoption: March 3, 2002
For further information, please call: (512) 475-0387