House Bill No. 600, introduced by Representative Geymann, proposes significant changes to the severance tax rates on oil production in Louisiana. The bill reduces the severance tax rate from 12.5% to 6.5% for oil produced from wells completed on or after July 1, 2025. Additionally, it establishes special rates for oil produced from certain types of wells, including incapable wells, stripper wells, inactive wells, and orphan wells. The new rates for these special categories are set at 6.25% for incapable wells, 3.125% for stripper wells, and varying rates for inactive and orphan wells based on their production status.

The bill amends existing law to clarify the definitions and tax rates applicable to these wells, ensuring that the reduced rates are only applicable under specific conditions, such as certification by the Department of Revenue. The provisions of this act will take effect on July 1, 2025, and will apply to taxable periods beginning on or after that date. This legislative change aims to incentivize oil production from newly completed wells while providing relief for lower-producing wells.

Statutes affected:
HB600 Original: 47:633(7)
HB600 Engrossed: 47:633(7)