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%) on the gross value of production. Additionally, the bill clarifies that production from wells spudded prior to July 18, 2018, and on or after that date will be taxed at the new five percent (5%) rate for the first thirty-six months of production. If a constitutional provision is approved, the tax rate for the first thirty-six months could further decrease to two percent (2%).

The bill also introduces exemptions for secondary and tertiary recovery projects and for wells completed using recycled water, providing a five-year exemption for the former and a twenty-four-month exemption for the latter. Refunds for gross production taxes paid during these exempt periods are outlined, with specific conditions and limits on the total amount of refunds available. The bill is set to take effect on November 1, 2025.

Statutes affected:
Introduced: 68-1001