OklahomaHB 1372Oklahoma 2026 Regular SessionHouseWALLET

Revenue and taxation; gross production tax; limited exemption for production from certain wells; surety; effective date; emergency.

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 1 benefits, 2 costs, 3 mixed.

Tax breaks for recovery and recycled-water wells

Production from enhanced recovery projects that start or are approved on or after July 1, 2022 is exempt from gross production tax for up to five years, ending when the process stops. Wells drilled but not completed by July 1, 2021 and finished using recycled water on or after July 1, 2022 get a 24-month exemption, sized to the percent of recycled water used. Refunds are paid after the fiscal year ends; file within 18 months. Annual caps apply: up to $15 million for enhanced recovery and $10 million for recycled-water claims, with proration and a 20% per-entity cap for the $15 million pool. Each well can use only one of these exemptions at a time; after the recycled-water period ends, a well may later qualify for enhanced recovery. Rules take effect July 1, 2025.

Lower tax for older-spudded wells

Wells spudded before July 1, 2025 pay 5% for the first 36 months from first production. After that, they pay the standard rate. If voters approve State Question 795, the first 36 months are taxed at 2% instead. These rules apply beginning July 1, 2025.

Standard taxes on oil, gas, minerals

The law taxes oil and gas at 7% of gross value. Oil is measured per 42-gallon barrel at 60°F. Asphalt and certain metal ores pay 0.75%. These rates apply in Oklahoma beginning July 1, 2025.

GPT replaces some property taxes; limits remain

Paying Oklahoma’s gross production tax covers local property taxes on producing lease rights and equipment actually needed and in use for production during that tax year. Other property and buildings still owe regular ad valorem tax. Starting July 1, 2025, items are not exempt just because GPT is paid unless they are actually necessary and in use; the exemption includes the wellbore and non-recoverable down-hole casing used for waste disposal.

Orphaned-well tax cut and required bond

Projects on the Commission’s orphaned-well list get a 50% gross production tax rate cut for 36 months from the project start. Before production, the producer must post $25,000 per well as a bond, letter of credit, cash, or CD for 36 months. The Secretary of State holds it for the Plugging Fund if the well is abandoned. These rules start July 1, 2025.

Stronger GPT audits, liens, and penalties

Starting July 1, 2025, the Tax Commission can demand records, examine books, and hold hearings for gross production tax. If reports are wrong or missing, the Commission computes the correct tax. Willful refusal to testify or provide records is a misdemeanor, up to a $500 fine per day, up to one year in jail, or both. The tax is also a lien on royalty interests.

Sponsors & Cosponsors

Sponsor

Brad Boles
Republican • House

Cosponsors

Grant Green
Republican • Senate
John Waldron
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 126 • No: 2

Senate vote • 4/30/2025

THIRD READING

Yes: 0 • No: 1

Senate vote • 4/17/2025

emergency

Yes: 0 • No: 0

House vote • 3/11/2025

Top_of_Page

Yes: 90 • No: 0

House vote • 2/26/2025

DO PASS

Yes: 28 • No: 1

House vote • 2/6/2025