The bill amends Section 1001 of the Oklahoma gross production tax law, specifically adjusting the tax rates for oil and gas production. The tax rate for oil and gas production is reduced from seven percent (7%) to five percent (5%). Additionally, the bill clarifies that production from wells spudded prior to July 18, 2018, will also be taxed at the five percent rate for the first thirty-six months of production. If a constitutional provision is approved, the tax rate for these wells could further decrease to two percent (2%) for the first thirty-six months, reverting to seven percent (7%) thereafter.

Furthermore, the bill introduces exemptions for secondary and tertiary recovery projects initiated on or after July 1, 2022, allowing for a five-year exemption from gross production tax. It also provides a two-year exemption for oil and gas production from wells completed using recycled water. The bill outlines the process for claiming refunds for exempted production taxes and establishes limits on the total amount of refunds available per fiscal year. The effective date for these changes is set for November 1, 2025.

Statutes affected:
Introduced: 68-1001