Sales Tax Refunds

Many times, we are able to utilize our unique knowledge of the oil and gas industry and look at an operator’s invoices to determine what is taxable and what is not. Often what we see, is there is an opportunity to review invoices and find sales tax overpayment.


The sales tax code can vary by state with unique exemptions in each, but in this instance an operator had engaged us to provide a review of all of their invoices. During our review, we had a batch of invoices that looked like rental of personal property (which is taxable), but we needed to dig deeper to understand the use of the property in question.


We needed to understand how the tangible personal property (TPP) was being used and at what point of the drilling activity. We wondered about some things on the invoices related to the TPP, so we had a quick chat with the operations manager in the coffee room about our questions. This led to a field trip to see the vendor in action at a well site. Discussion with the vendor, photos of the activities and documentation led to a claim for refund.


A tax savings of over $250,000 for our client due to understanding the oilfield activities that were going on and our willingness to keep digging.

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