Home   Excise Tax   Miscellaneous Tax   Oil

Oil

Tax is levied and collected from either the producer or purchaser of oil in the State of Arkansas at the time of severance. 
  
The tax rate on oil shall be:

• 4% of the market value at the time of severance, when production averages 10 barrels or less per well per day. ---- §26-58-111(6)(b) 
• 5% of the market value at the time of severance, when production averages more than 10 barrels per well per day. ---- §26-58-111(6)(a) 

In addition to the above tax, additional taxes are levied on oil at the rates of:

• $0.005 (5 mils) per barrel of oil produced in this state. ---- §26-58-301(a)(1) 
• $0.02 per barrel of oil produced in this state. ---- §26-58-302(a)(1) 

Any oil producer in this state who provides for the disposition of salt water produced in the production of oil in this state, by the means of an approved underground salt water disposal system, shall be allowed a credit on severance taxes due and payable to the State of Arkansas.  The total severance tax credits allowed all oil producers during any calendar year by the director shall not exceed $370,000.

Applicable statutes: AR Code Ann.  §§26-58-101 et seq., 26-58-201 et seq., 26-58-301 et seq.

Forms

Statistics