Severance Tax Services

Don't Overpay In Severance Tax

A severance tax review is an analysis of an oil and gas operator’s wells that are in a state that requires a ‘severance tax’ on minerals taken from the ground. There are exemptions unique to each state that allow that tax burden to be reduced. Operators are required to report to the state the actual volume of minerals being removed, which is then taxed at various rates. For this specific tax, there are deductions and exemptions that apply, as well as tax rate applications that are often overlooked or missed by the producer.  In many cases, mineral operators pay severance taxes far in excess of what is actually required by the state. Our team is second to none in identifying missed opportunities, and recovering lost tax dollars sending them back to where they belong, your bottom line.

Severance Tax Review

Our team reviews your severance tax filings based on the open statute available to us. We have had tremendous success in finding overpayment of severance taxes and file refunds to the state on your behalf.

Marketing Cost Study

Oil & gas producers are allowed to take “marketing cost deductions” off of the producer’s gross cash receipts from the sale of the gas. In certain areas, these deductions can be higher or lower, and our team studies your personal deductions, maximizing revenue for you.

Audit Defense

If your firm is undergoing an audit for severance taxes, we can help. We have defended multiple client audits and some have resulted in our team reducing our client’s liability to zero.

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Discover the solutions we provide for our clients through a relevant, real-life case study.

Our Severance Tax Process

01

WE IDENTIFY REFUNDS

We have an extremely sharp department when it comes time to identify your severance tax filings and any potential for overpayment. We will not come in and just pick the easy to identify low-hanging fruit. We will identify both your liabilities and refund opportunities to give you the full compliance picture.

02

YOU DECIDE

Unlike other firms, we put you in the driver’s seat when it comes time to file your refund. Sometimes through our thorough work, we do find instances where there is exposure or underpayment of severance tax. In that situation, we bring our findings to you and let you decide what to pursue. We understand the dynamic of letting our clients decide what is best for their business.

03

WE TRAIN YOUR TEAM

After our work is complete, we train every single one of our clients on our findings so they can begin to identify these types of situations. We believe in adding value to our clients through a relationship and want to make sure they avoid overpaying severance tax going forward.

Our Team

Our severance tax team is unique and diverse.  Having professionals on staff who’ve recently served in various capacities including Comptroller Policy, Revenue Regulatory, to VP of Tax, we maintain an exceptional perspective and can truly analyze your processes from every angle to offer the highest level of expertise through a severance tax review.  We also possess state agency relationships and knowledge which allows us to assist you in the best way possible.  The majority of our work is performed off-site in our offices and requires minimal time from our clients and their support staff. Our mission with a severance tax review is to leave you better than we found you, to be the trusted advisor that you call anytime you need state tax help or advice.

Process

We want to look at your process from the field all the way to the financial statement, to fully understand and help improve the flow to tax returns

Deep Dive

We will not come in and just pick the easy to identify low-hanging fruit

Identify

We will identify both your liabilities and refund opportunities to give you the full compliance picture

Representation

Currently representing over 30%+ of the leases in TX & LA and over 40%+ in the Rocky Mountains for property tax, we can minimize the burden of data collection as we share data with our ad valorem group

Relationships

We maintain outstanding relationships with all state agencies

Training

We’ll train you on our findings, adding value to your in house team

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State-by-State Severance Tax Comparison Guide

Our team at KE Andrews has compiled a guide to severance tax rates in some of the largest oil and gas producing states. Inside you also will find the exemptions and deductions that these states allow.

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Read more about current energy news and insights from our team here at KE Andrews.

Our team at KE Andrews provides a centralized place for all relevant news and legislation. Our team also provides thought leadership and insights on topics that are in the news.