Well Product Tax Table

If the states where your wells are located charge taxes on the production from those wells, and the tax is calculated based upon the well production, you can setup a record for that state in the Well Product Tax Table. Once a table is added for a particular state and associated with the well, taxes will be automatically calculated and withheld from the owner's checks. These records are entered in the Well Products Tax Table screen by choosing Maintain, Well Product Tax Tables from the menu. The Well Product Tax Table should only be used if the operator is responsible for withholding the tax and remitting it to the state. If the purchaser is withholding the tax on your well production, it is not necessary to use the Well Product Tax Table.

Any well that has a valid tax table code in its Well Information record and is not exempt from taxes will have taxes calculated at the given rate specified in the Well Product Tax Table.

Table Code
Enter the code used to define these tax rates. This is the table that will be selected in each well record. You can assign any code you wish that is easy to remember.

Description
Enter a description for this table.

Oil Tax
Enter the amount of tax to be calculated on oil revenue. If the tax is to be calculated as an amount, enter the amount per BBL that should be withheld. If the tax is to be calculated as a percentage, enter the percentage of gross Oil revenue that should be withheld. Percentages should be entered in decimal form.

Gas Tax
Enter the amount of tax to be calculated on gas revenue. If the tax is to be calculated as an amount, enter the amount per MCF that should be withheld. If the tax is to be calculated as a percentage, enter the percentage of gross Gas revenue that should be withheld. Percentages should be entered in decimal form.

Tax Name
Enter the name of the tax as you wish it to appear on the Owner Distribution Statement and other various reports.

Calculate Tax as Amount or Percentage
Severance taxes can be calculated as a dollar amount per BBL and/or MCF, or as a percentage of gross Oil and/or Gas revenue.

If Amount is chosen, the rate entered is multiplied by the number of BBL or MCF in order to calculate the tax. Amounts are entered as dollar and cent amounts per BBL or MCF. For example: if oil were taxed at 10 cents a BBL, then the amount entered would be 0.100000.

If Percentage is chosen, the rate entered is multiplied by the gross dollar amount of oil or gas in order to calculate the severance tax. Percentages are entered as a whole number. For example: 4.5% would be entered as 4.50000.

You may specify up to four separate tax calculations for each Well Product Tax Table. These taxes can be calculated for Oil, Gas and Other Product Revenue.

The tax that is withheld is posted to the accounts chosen for Product Tax Payable 1-4 in the QuickBooks Posting Preferences. Tax Calculation 1 is posted to Product Tax Payable 1 account, and so on. The accounts chosen for Product Tax Payable 1-4 should be Other Current Liability or Accounts Payable types of accounts in QuickBooks. The amounts are posted to the accounts chosen during the Post Revenue Run to QuickBooks process.

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