Tax is collected from the Operator/Producer on the market value of gas sold. The 1st Purchaser of natural gas is required to receive advanced ascertainment that the Operator/Producer holds an Arkansas Natural Gas Severance Tax Permit. If advanced ascertainment is not received, the 1st Purchaser is required to withhold natural gas severance tax on the gas purchase. The Operator/Producer and 1st Purchaser have monthly reporting responsibilities. The applicable tax rates of 1.25%, 1.5%, and 5.0% are dependent on the well classification by the Arkansas Oil and Gas Commission.
Applicable Statutes: AR Code Ann. §26-58-101 et seq., §26-58-201 et seq.