Fillable Form 10-171 - Amended Natural Gas Tax 2010 (Page 2 of 2) in pdf

Form 10-171 (Back)(Rev.2-08/2)

INSTRUCTIONS FOR COMPLETING

TEXAS AMENDED REPORT OF NATURAL GAS TAX PURCHASER LEASE DETAIL SUPPLEMENT

You have certain rights under Chapters 552 and 559, Government Code, to review, request, and correct information

we have on file about you. Contact us at the address or toll-free number listed on your report.

GENERAL INFORMATION

The reverse/rebook concept should be used when amending previously reported data. When amending previously reported data, enter:

• lease information in Items 1 through 13 or use the locator number.

• volumes and values as negative figures to delete data previously reported in Item 14 through 22, except Items 16 and 21. Enter a dash in the beginning of a number

to denote a negative sign.

• new lease information in Items 1 through 13 including “exemption type in Item 9 and “API number” (in Item 10, if applicable) with the correct volumes and values.

LOCATOR NUMBER — Once a report has processed, a locator number is assigned by the Comptroller’s office for each lease transaction. The purpose of the locator

number is to identify the lease that needs to be corrected. Using the locator is optional and will eliminate the need to re-enter unchanged lease data. When using a

locator number, only enter data that needs to be corrected. The locator number can be used to replace Items 3 through 13 and/or adjust Items 14 through 22, except

Item 21. More information on using locator numbers is available on the Comptroller’s Web site.

SPECIFIC INSTRUCTIONS

All gas volumes are reported in “MCF.” For information on converting MCF to MMBTU or converting MMBTU to MCF, see the Natural Gas Tax Guide at the Comptroller’s

Web site

ITEMS 1, 5, 7 and 8

• Enter the lease identification number assigned by the Texas Railroad Commission (RRC) in Item 7. For a gas lease, enter the six-digit lease number. For

an oil lease, add a leading zero (0) to the five-digit lease number and enter as a six-digit number. If the RRC has not assigned a lease number, then enter

the 6-digit drilling permit number in Item 7.

• Items 7 and 8: Do not leave blank.

• If reporting a plant, then enter R3 and the last four digits of the plant identification number assigned by the RRC in Item 7.

ITEM 3.

COMMODITY: Enter the 2-digit alpha code for the type of commodity reported on the lease identified in Item 1 and Item 7.

• Raw Gas (RG) - Sale or purchase of raw gas, unprocessed gas from an oil well, or gas well gas.

• Condensate (CN) -The taxable disposition and purchase of all condensate from a gas well, actual or theoretical. Condensate is the liquid hydrocarbon

(a high gravity oil) that is or can be, removed from gas by a separator. It does not include absorption and separated by a fractionating process.

Condensate volume should be rounded to the nearest barrel.

• Residue (RS) - Residue gas sold or purchased only when there is a distinct sale or purchase of residue gas. Example: If a processing plant takes title

to both the products and the residue commodities, do not report the products and residue commodities as separate items. Use the raw gas designation

and the plant operator should be indicated as the purchaser.

• Products (PR) -Report only when the purchasers of products and residue commodities are different parties. The volume associated with the product

commodity will be the raw gas volume delivered to the gas processing plant (plant inlet volume).

ITEM 4.

COMMODITY CODE: Enter the numeric code for the type of commodity reported on the lease identified in Item 1 and Item 7. The numeric codes are:

1 - Raw Gas, 4 - Condensate, 5 - Residue, 6 - Products.

ITEM 6.

COUNTY CODE: Enter the 3-digit county code for the county of production indicated in Item 2. A list of county codes is available in the Comptroller’s Web

site at /taxinfo/taxforms/10-codes.html.

CHECK DIGIT: Enter the check digit. For information on the calculation of the check digit, see the Natural Gas Tax Guide on the Comptroller’s Web site at

/taxinfo/taxpubs/tx96_203.pdf.

ITEM 9.

EXEMPTION TYPE: Enter the Comptroller approved numeric code for the legislative exemption type, if applicable.

CODE DESCRIPTION OF APPROVED EXEMPTION TYPE

Two-year inactive well, effective Sept. 1, 1997

Three-year inactive well, effective Sept. 1, 1991

Flared/released casinghead gas well, effective Sept. 1, 1997

Incremental production casinghead gas lease, effective Sept. 1, 1997

High cost gas lease with reduced tax rate effective, Sept. 1, 1996

Qualifying low-producing gas well, effective Sept. 1, 2005

Three-year inactive well, effective Sept. 1, 1991

Reactivated orphaned well, effective Jan. 1, 2006

ITEM 10. API NUMBER: Enter the last 8 digits of the America Petroleum Institute (API) number assigned by the Texas Railroad Commission to each well that

qualifies for a well-level exemption. The API number is only required for the two-year inactive lease exemption (Type 3), three-year inactive well exemption

(Type 7), and reactivated orphaned well exemption (Type 12).

ITEMS 11 and 12: Enter the name of your producer in Item 11 and their 11-digit Texas taxpayer number in Item 12.

ITEM 13. TAX REIMBURSEMENT: Mark the block indicating whether tax reimbursement is included in calculating the value in Item 15, as outlined in your contract.

For information on tax reimbursement, see Tax Rule 3.18, on the Comptroller’s Web site.

ITEM 14 YOUR VOLUME: Enter the total volume of gas or condensate purchased. Do not use decimals.

ITEM 15. VALUE OF YOUR VOLUME: Enter the entire value associated with the volume indicated in Item 14. This is usually referred to as the “contract price.” Do

not include tax reimbursement, if applicable.

ITEM 16: ARE YOU LIABLE FOR TAX?: You must mark “YES” or “NO” for all lease types, even if you do not owe tax. Do not leave blank. Tax liability must be

reported as “YES” by at least one party as stated in the contract between the operator and the purchaser, even if the lease qualifies for 100% exemption

and taxes are not due because of the legislative exemption status.

ITEM 17. GOVERNMENTAL ROYALTY VOLUME: Enter the volume of gas not subject to tax because of a governmental exempt status, such as a city, town or village

government in Texas, a county government in Texas, an independent school district or common school district in Texas, public (state owned) colleges and

universities in Texas, or political subdivisions of the Federal government.

ITEM 18. GOVERNMENTAL ROYALTY VALUE: Enter the value of gas reported in Item 17.

ITEM 19. MARKETING COST: Enter actual marketing cost incurred. The “market value at the mouth of the well” shall be determined by ascertaining the producer’s

actual marketing costs and subtracting these costs from the producer’s gross cash receipts from the sale of the gas. For more information on allowable

marketing costs, see the Comptroller’s Web site.

ITEM 20. NET TAXABLE VALUE: Enter the calculation of Item 15 less Items 18 and 19. If Items 18 and 19 exceed Item 20, enter the net taxable value as zero in Item

20. If reporting the following exemption types, then enter net taxable values indicated below:

EXEMPT TYPE

ENTER NET TAXABLE VALUE AS:

03, 04, 07, or 12

zero

the sum of Item 15 less Items 18 and 19 and proceed to Items 21 and 22.

50% of the sum of Item 15 less Items 18 and 19

25% of the sum of Item 15 less Items 18 and 19 if the Comptroller certified price of gas ranges from $3.01 to $3.50 per MCF.

50% of the sum of Item 15 less Items 18 and 19 if the Comptroller certified price of gas ranges from $2.51 to $3.00 per MCF .

Zero if the Comptroller certified price of gas is less than or equal to $2.50 per MCF.

ITEM 21. REDUCED TAX RATE FOR TYPE 05: Enter the 3-digit reduced tax rate for the approved exemption “Type 5” lease indicated in Item 7.

ITEM 22. TAX DUE ON TYPE 05: Enter the tax due amount for the approved exemption “Type 5” lease reported by multiplying Item 20 by the tax rate indicated in Item 21.

Form 10-171 - Amended Natural Gas Tax 2010 Page 2

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