This bill amends the severance tax rates on oil in Louisiana, specifically targeting oil produced from wells completed before and after July 1, 2025. For oil produced from wells completed before this date, the tax rate will be set at twelve and one-half percent of its value at the time and place of severance. Conversely, oil produced from wells completed on or after July 1, 2025, will be taxed at a reduced rate of six and one-half percent. Additionally, the bill introduces provisions for oil produced from wells classified as incapable or stripper wells, establishing lower tax rates of six and one-fourth percent and three and one hundred twenty-five thousandths percent, respectively, under certain conditions.

The bill also outlines specific tax rates for oil production from wells that have been inactive for extended periods or designated as orphan wells. For these cases, the tax rates will be significantly reduced, with provisions for a ten-year period if production commences before or after October 1, 2028. The changes aim to provide a more structured and potentially beneficial tax framework for oil production in Louisiana, with the new provisions set to take effect for taxable periods beginning on or after July 1, 2025.

Statutes affected:
HB600 Original: 47:633(7)
HB600 Engrossed: 47:633(7)
HB600 Enrolled: 47:633(7)
HB600 Act 295: 47:633(7)