USA Statutes : oregon
Title : TITLE 28 PUBLIC FINANCIAL ADMINISTRATION
Chapter : Chapter 324 Oil and Gas Tax
As used in this chapter, unless the context
requires otherwise:

(1) “Department” means the Department of Revenue.

(2) “Gas” means natural gas and casinghead gas.

(3) “Gross value” or “gross sales value” means the actual cash
price prevailing for oil or gas of the kind, character and quality of the
oil or gas subject to the tax imposed under this chapter at the time such
oil or gas is produced, as determined by the department.

(4) “Gross production” means the total volume of oil or gas
extracted from a well, including oil or gas extracted but not sold.
“Gross production” does not include the extraction from a well of any oil
or gas reinjected therein for storage.

(5) “Produced and saved” means extracted and sold, extracted and
used or extracted and retained for later sale or use.

(6) “Oil” means petroleum, crude oil, mineral oil and casinghead
gas.

(7) “Person” includes partnership, corporation, association,
fiduciary, trustee and any combination of individuals.

(8) “Quarter” and “quarterly” mean calendar quarters. [1981 c.889
§1] (1) A privilege tax
of six percent of the gross value at the well is levied upon the
production of oil and gas within the State of Oregon. The gross value at
the well shall be reduced by the value of any part thereof, the ownership
or right to which is exempt from taxation.

(2) The tax levied shall be measured by the value of the whole
production, including what is commonly known as the royalty interest.
[1981 c.889 §2; 1991 c.459 §322] An exemption from the tax
levied on oil or gas imposed by ORS 324.070 is granted upon the first
$3,000 in gross sales value of the gross production each calendar quarter
from each well. [1981 c.889 §3](1) Any royalty or other
interest in oil or gas owned by the state, counties, cities, towns,
school districts or other municipal corporations or political
subdivisions, is exempt from the gross production tax imposed by ORS
324.070.

(2) There shall be allowed as a credit against taxes imposed by
this chapter all ad valorem taxes imposed by the state, counties, cities,
towns, school districts and other municipal corporations and political
subdivisions upon any property rights attached to or inherent in the
right to produce oil and gas, upon producing oil and gas leases, upon
machinery, appliances and equipment used in and around any well producing
oil or gas and actually used in the operation of the well, upon oil and
gas produced in the state and upon any investment in any property
mentioned or described in this subsection. [1981 c.889 §4](1) The gross production tax on oil or gas imposed by this chapter
shall be paid on a quarterly basis. The tax shall become due on the 45th
day following the preceding quarterly period on all oil or gas produced
in and saved during the preceding quarterly period, and, if the tax is
not paid on or before the end of the 45th day, it shall become delinquent
and shall be collected as provided in this chapter. The Department of
Revenue, upon request and a proper showing of the necessity therefor, may
grant an extension of time, not to exceed 30 days, for paying the tax and
when such a request is granted the tax shall not be delinquent until the
extended period has expired.

(2) On oil or gas sold at the time of production, the gross
production tax shall be paid by the purchaser, and the purchaser shall
and is authorized to deduct in making settlements with the producer or
royalty owner, the amount of tax so paid. In the event oil on which the
gross production tax becomes due is not sold at the time of production
but is retained or used by the producer, the tax on the oil not so sold
shall be paid by the producer, including the tax due on royalty oil not
sold. In settlement with the royalty owner, the producer shall have the
right to deduct the amount of the tax so paid on royalty oil or to deduct
royalty oil equivalent in value at the time the tax becomes due with the
amount of the tax paid.

(3) The amount of gas produced and used for fuel or otherwise used
in the operation of any lease or premises in the drilling for or
production of oil or gas, or for repressuring, shall not be considered
for the purpose of this chapter as gas actually produced and saved.

(4) When oil or gas is sold at a sale price that does not represent
the cash price prevailing for oil or gas of like kind, character or
quality in the field from which such product is produced, the department
may require the tax to be paid upon the basis of the prevailing cash
price then being paid at the time of production in the field for oil, or
gas of like kind, quality and character. [1981 c.889 §5] (1) The
tax imposed by this chapter shall be paid to the Department of Revenue
and the person paying the tax shall file with the department at the time
the tax is required to be paid, a statement, under oath, on forms
prescribed by the department, giving, with other information required,
the following:

(a) Full description of the property by lease name, subdivision of
quarter section, section, township and range from which the oil or gas
was produced;

(b) The name of the producer;

(c) The gross amount of the oil or gas purchased;

(d) The total value of the oil or gas at the price paid, if
purchased at time of production;

(e) The formation from which the oil or gas is produced; and

(f) The prevailing market price of oil or gas sold at time of
production.

(2) If a purchaser of oil or gas pays the tax, the producer of the
oil or gas for which the tax is being paid shall make available to the
purchaser all information required under subsection (1) of this section.
In lieu of the statement, a purchaser, at time of production, may furnish
a true verified copy of the regular settlement sheet in use by such
purchaser, if the sheet contains all the information required. [1981
c.889 §6] (1) Any person
engaged in the production within this state of oil or gas shall, on or
before the 45th day following the preceding quarterly period, file with
the Department of Revenue a statement under oath, upon forms prescribed
by the department, giving, along with other information required, the
following:

(a) The name of the property and the description by subdivision of
quarter section, section, township and range;

(b) The gross amount of oil or gas produced and saved;

(c) The name of the purchaser and the price paid by the purchaser;
and

(d) The formation from which the oil or gas is produced.

(2) Each report required by this section shall be filed on separate
forms as to product and county. [1981 c.889 §7; 2005 c.94 §112](1) Reports required under ORS 324.120 and 324.130 from either
the purchaser or producer, as the case may be, shall be delinquent after
the last day fixed for filing, and every person required to file a report
shall be subject to penalty of $25 per day for each property upon which
the person fails or refuses to file a report. The penalties prescribed by
this section shall be for failure to file reports and shall be in
addition to the interest and penalty imposed for delinquent tax, and
shall likewise constitute a lien against the assets of the person failing
or refusing to file a report. The penalties prescribed under this section
shall be collected in the same manner as gross production taxes and shall
be deposited in the suspense account referred to in ORS 324.340.

(2) When royalty is claimed to be exempt from taxation by law, the
facts on which claims of exemption are based and other information as the
Department of Revenue may require shall be furnished in the report. [1981
c.889 §8; 1983 c.740 §98] (1) The
provisions of ORS chapters 305 and 314 as to the audit and examination of
reports and returns, determination of deficiencies, assessments, claims
for refund, conferences and appeals to the Oregon Tax Court, and the
procedures relating thereto, shall apply to the determination of taxes,
penalties and interest under this chapter, except where the context
requires otherwise.

(2) A delinquent tax or deficiency shall bear interest at the rate
established under ORS 305.220 for each month, or any fraction thereof,
from the time the tax was due. [1981 c.889 §10; 1982 s.s.1 c.16 §24; 1995
c.650 §48] If any person
neglects or refuses to make a return required to be made by this chapter,
the Department of Revenue is authorized to determine the tax due, based
upon any information in its possession or that may come into its
possession. The department shall give the person liable for the tax
written notice by registered mail or by certified mail with return
receipt of the tax and delinquency charges and the tax and delinquency
charges shall be a lien from the time of production. If the tax and
delinquency charges are not paid within 30 days from the mailing of the
notice, the department shall proceed to collect the tax in the manner
provided in ORS 324.190. [1981 c.889 §11; 1991 c.249 §27] (1) If any tax imposed by this
chapter, or any portion of such tax, is not paid within 30 days after the
date that the written notice and demand for payment required under ORS
305.895 is mailed, the Department of Revenue shall issue a warrant,
directed to the sheriff of any county of the state, commanding the
sheriff to levy upon and sell the real and personal property of the
person owing the tax, found within that county, for the payment in the
amount thereof, with the added penalties, interest and cost of executing
the warrant, and to return the warrant to the department and to pay to it
the money collected by virtue thereof, within 60 days after receipt of
the warrant. A copy of the warrant shall be mailed or delivered to the
taxpayer by the department at the taxpayer’s last-known address.

(2) The sheriff shall, within five days after the receipt of the
warrant, record a copy with the county clerk, and thereupon the clerk
shall enter in the County Clerk Lien Record the name of the person
mentioned in the warrant, and the amount of the tax or portion thereof
and penalties for which the warrant is issued and the date when the copy
is recorded. Thereupon the amount of the warrant so recorded shall become
a lien upon the title to and interest in real property of the person
against which it is issued, in the same manner as a judgment that creates
a judgment lien under ORS chapter 18. The sheriff thereupon shall proceed
upon the warrant in all respects, with like effect, and in the same
manner prescribed by law in respect to executions issued against property
upon judgments of a court of records, and shall be entitled to the same
fees for services in executing the warrant, to be added to and collected
as a part of the warrant liability.

(3) In the discretion of the department a warrant of like terms,
force and effect may be issued and directed to any agent of the
department authorized by it to collect this tax. In the execution of the
warrant, such agent has the powers conferred by law upon sheriffs, but is
entitled to no fee or compensation in excess of actual expenses paid in
the performance of such duty.

(4) If a warrant is returned not satisfied in full, the department
shall have the same remedies to enforce the claim for taxes against the
owner as if the state had a recorded judgment against the owner for the
amount of the tax. [1981 c.889 §12; 1983 c.696 §18; 1985 c.761 §22; 1989
c.625 §79; 2003 c.576 §206] (1) Any person having a
lien upon or any interest in real estate against which the amount of the
warrant provided for in ORS 324.190 has become a lien, notice of which
has been recorded in accordance with the laws of the state prior to the
filing of the warrant, may request the Department of Revenue in writing
to release the real estate from the lien of the warrant. If, upon such
request the department finds that a sale of the property would not result
in satisfaction of the taxes due in whole or in part, the department
shall execute a release of the lien as to such property and such release
shall be conclusive evidence of the extinguishment of the lien as to that
property. If the department fails to act upon a request for release of a
lien under this subsection within 60 days from the date of the request,
any person having a lien upon or interest in the property against which
the warrant has become a lien may make the department a party to any
proceeding brought to enforce any interest in or lien upon such real
property, and the determination of the court in such proceeding shall be
conclusive and binding upon the department and the State of Oregon.

(2) In addition to the release of the lien provided for in
subsection (1) of this section, the department may execute releases in
the following cases, which releases shall be conclusive evidence of the
extinguishment of the lien:

(a) If the department finds that the liability for the amount of
the warrant, together with all interest, penalties and costs in respect
thereto has been satisfied.

(b) If the department finds that the fair market value of that part
of the property remaining subject to the lien is at least double the
amount of the liability remaining unsatisfied in respect of such tax and
the amount of all prior liens upon the property.

(c) If there is furnished to the department a bond, in such form
and with the security the department considers sufficient, or an
irrevocable letter of credit issued by an insured institution, as defined
in ORS 706.008, in either case conditioned upon the payment of the amount
of the warrant, together with all interest in respect thereof, within 60
days after the issuance of the release.

(d) If there is paid to the department in partial satisfaction of
the amount of the warrant an amount not less than the value, as
determined by the department, of the interest of the State of Oregon in
the part of the property to be so discharged. In determining such value
the department shall give consideration to the fair market value of the
part of the property to be so discharged and to such liens thereon as
have priority to the lien of the State of Oregon. [1981 c.889 §13; 1991
c.331 §55; 1997 c.631 §460]All taxes, interest and penalties due and unpaid
under this chapter, shall constitute a debt due the State of Oregon from
the person liable for the tax and may be collected, together with
interest, penalty and costs, by appropriate judicial proceeding, which
remedy is in addition to all other existing remedies. However, no
proceeding for the collection of taxes under this section shall be
instituted after the expiration of six years from the date such taxes
were due. [1981 c.889 §14] When oil or
gas subject to gross production tax under this chapter is in litigation
or dispute involving ownership of the oil or gas, and the oil or gas is
sold, the usual gross production tax, as provided by law, shall be paid
from the proceeds or funds in the hands of the purchaser of the oil or
gas and in lieu of payment for the production, to the extent of the tax.
The receipt of the Department of Revenue therefor shall be accepted in
lieu of money in settlement of the purchase price of the production. If
oil or gas is assigned as security for debt or otherwise, the tax shall
be likewise paid by the assignee, and the tax shall constitute a lien
upon the interest assigned, which shall be paramount to the indebtedness
for which the assignment is made, and if the tax becomes delinquent, the
usual penalty shall apply. [1981 c.889 §16]ADMINISTRATION The Department of Revenue may:

(1) Require any producer of oil or gas, purchaser of oil or gas,
agent or employee of any producer or purchaser or the owner of any
royalty interest in oil or gas to furnish any additional information
considered by the department to be necessary for the purpose of correctly
computing the amount of tax imposed by this chapter;

(2) Examine the books, records and files of any producer, purchaser
or royalty owner;

(3) Administer oaths and compel the attendance of witnesses and the
production of books, records and papers of any person by subpoena; and

(4) Make any investigation considered necessary to a full and
complete determination as to the amount of production from any oil or gas
location, or of any producer of oil or gas, and as to the correct
determination of taxes due under this chapter. [1981 c.889 §9; 1995 c.650
§49] (1) The Department of
Revenue is authorized to adopt all necessary rules for the purpose of
making and filing all reports required under this chapter and otherwise
necessary to the enforcement of this chapter.

(2) The department may, at its option and discretion, require a
sufficient bond from any person charged with the making and filing of
reports and the payment of the taxes imposed by this chapter. The bond
shall run to the State of Oregon and shall be conditioned upon the making
and filing of reports as required by law, upon compliance with the rules
of the department, and for the prompt payment, by the principal, of all
taxes justly due the state by virtue of the provisions of this chapter.

(3) When any reports required have not been filed, or may be
insufficient to furnish all the information required by the department,
the department shall institute, in the name of the State of Oregon, upon
relation of the department, any necessary action or proceedings in the
court having jurisdiction, to enjoin the person from continuing
operations until the reports have been filed as required, and in all
proper cases, injunction shall issue without bond from the State of
Oregon.

(4) Upon showing that the state is in danger of losing its claims
or the property is being mismanaged, dissipated or concealed, a receiver
shall be appointed at the suit of the state. [1981 c.889 §18]DISPOSITION OF REVENUE (1) The revenues
derived from the tax imposed by this chapter including interest and
penalties, shall be deposited in a suspense account created pursuant to
ORS 293.445. After payment of refunds and the expenses of the Department
of Revenue incurred in the administration of this chapter, the remaining
revenues shall be paid into the Common School Fund and are continuously
appropriated to the Department of State Lands for the purposes for which
other moneys in the Common School Fund may be used.

(2) The amount of moneys necessary to pay refunds and expenses of
the Department of Revenue incurred in the administration of this chapter
are continuously appropriated to the Department of Revenue from the
suspense account referred to in subsection (1) of this section. [1981
c.889 §20]CIVIL PENALTY (1) No person, or
officer or employee of a corporation, or a member or employee of a
partnership, shall, with intent to evade any requirement of this chapter,
or any lawful requirement of the Department of Revenue pursuant to this
chapter:

(a) Fail to pay any tax or to make, sign or verify any return or to
supply any information required;

(b) Make, render, sign or verify any false or fraudulent return or
statement; or

(c) Supply any false or fraudulent information.

(2) A person or an officer or employee of a corporation or a member
or employee of a partnership who violates subsection (1) of this section
is liable to a civil penalty of not more than $10,000, to be recovered by
the Attorney General, in the name of the state, in any court of competent
jurisdiction. The penalty provided in this subsection shall be in
addition to all other penalties in this chapter. [1981 c.889 §19]MISCELLANEOUS All statements or
settlement sheets for oil or gas shall have stamped or written thereon
the following words: “Gross production tax deducted and paid, and payee
accepts such deduction and authorizes payment to the State of Oregon.”
[1981 c.889 §17] (1) It
shall be the duty of every person engaged in the production of oil and
gas in this state to furnish to the Department of Revenue, upon forms
prescribed by the department, any and all information relative to the
production of oil or gas subject to gross production tax that may be
required to properly enforce the provisions of this chapter. The
department may require any person to install suitable measuring devices
to enable the person to include in the reports the quantity of oil or gas
produced in the State of Oregon.

(2) It shall be the duty of every person engaged in the operation
of a refinery for the processing of oil or gas in the State of Oregon to
furnish quarterly to the department, upon forms prescribed by the
department, any and all information relative to the amount of oil or gas
subject to gross production tax that has been processed by it during the
quarterly period, and oil on hand at the close of the period, that may be
required to properly enforce the provisions of this chapter.

(3) It shall be the duty of every person engaged in the purchase or
storing of oil subject to gross production tax in the State of Oregon to
furnish quarterly a report to the department, upon forms prescribed by
the department, showing the amount of oil in storage, giving, along with
other information required, the location, identity, character and
capacity of the storage receptacle in which the oil is stored.

(4) All reports required under this section, shall be filed for
each quarter and shall be delinquent if not filed on or before the 45th
day following the preceding quarterly period. The failure of any person
to comply with the provisions of this section shall make the person
liable to a penalty of $25 for each day the person fails or refuses to
furnish a statement or comply with the provisions of this chapter. The
penalty may be recovered at the suit of the state, on relation of the
department. Any penalty so collected shall be deposited in the suspense
account referred to in ORS 324.340. [1981 c.889 §15]