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KS Notice 96-0415 Mineral Severance Tax 1996-04-15

What crude oil severance tax exemption levels applied in Kansas from May 1996 through April 1997?

Short answer: For the fiscal period May 1, 1996 through April 30, 1997, the Kansas crude oil severance tax exemption levels were set using a determined average oil price of $15.81 per barrel. Because that price is more than $10.00 and less than $16.00, the exemption amounts (the same as the prior year) were: low production wells exempt if producing six (6) barrels per day or less, and water flood wells (depth 2,000 feet or more) exempt if producing seven (7) barrels per day or less. Under K.S.A. 79-4217(b)(2) and (d), the Secretary of Revenue determines the average price each year by April 15 from U.S. Department of Energy first-purchaser data, governing the following May-through-April period. This notice carries no printed notice number (the Department indexes it as Notice 96-0415) and expired April 30, 1997; the exemption levels reset annually.

Apply this to your situation

This page answers the general question as of 1996. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 1996
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Notice providing general public guidance, not a private ruling issued to one taxpayer. It is dated April 15, 1996 (effective May 1, 1996) and EXPIRED April 30, 1997, and carries no printed notice number (the Department indexes it as Notice 96-0415); later law and rates may change the result, so verify the current statute before relying on it. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

This annual crude oil severance tax notice sets the exemption levels for the fiscal period May 1, 1996 through April 30, 1997.

Under K.S.A. 79-4217, the oil exemption in number of barrels depends on the average price per barrel paid by first purchasers for the six months ending December 31, determined by the Secretary each April 15 from U.S. Department of Energy data.

The determined average price was $15.81 per barrel. Because it is more than $10.00 and less than $16.00, the exemption amounts (unchanged from the prior year) were:

  • Low production wells: exempt if six (6) barrels per day or less.
  • Water flood wells (2,000 ft or more): exempt if seven (7) barrels per day or less.

The notice carries no printed notice number (indexed as Notice 96-0415) and expired April 30, 1997; the levels are recomputed every year, so check the current annual notice.

What this means for you

If you produced crude oil from a low-output or water-flood Kansas lease during May 1996-April 1997, these barrel thresholds set whether your production was exempt from severance tax that year. The exemption resets annually with the average oil price, so this specific notice is expired -- use the current year's oil-exemption notice.

Common questions

Q: What oil price set the 1996-97 Kansas severance exemption levels?
A: A determined average of $15.81 per barrel, which (being over $10 and under $16) yielded exemptions of 6 barrels/day for low production wells and 7 for water flood wells.

Q: Is this notice still in effect?
A: No. It applied only to May 1, 1996 through April 30, 1997 and has expired; the exemption levels are recomputed each year based on the average oil price.

Citations and references

  • K.S.A. 79-4217(b)(2)(B) and (E) (low-production and water-flood oil severance exemptions)
  • K.S.A. 79-4217(d) (annual average-oil-price determination by April 15)

Subject

Exemptions for Oil Production, May 1996 through April 1997

Source

Original ruling text

Notice
Notice Number:
Tax Type: Mineral Severance Tax
Brief Description: Crude Oil Exemptions
Keywords:
Effective Date: 05/01/1996
Does this document
represent current
KDOR policy?
Expiration Date: 04/30/1997

Body:
SPECIAL NOTICE

TO: Kansas Oil Producers and Purchasers

FROM: John LaFaver
Secretary of Revenue

DATE: April 15, 1996

RE: May, 1996 through April, 1997, Exemptions for Oil Production

The 1987 Kansas Legislature approved new oil exemption criteria for "low production wells" and for "water flood" wells with a
depth of 2000 feet or more (See K.S.A. 79-4217(b)(2)(B) and (E). Specifically, since May, 1987, the oil exemption amount in
number of barrels depends on the average price per barrel paid by the first purchaser of crude oil for the six-month period ending
December 31 of the preceding year. The Secretary of Revenue is to obtain the necessary data from the United States Department of
Energy and determine the average oil price by April 15 of each year. The average oil price will then be used to determine oil
exemption amounts for the following twelve-month period commencing May 1 of that year through April 30 of the following year.
(See K.S.A. 79-4217(d)).

Following are the first purchaser statistics obtained from the Petroleum Marketing Division, Office of Oil and Gas, Energy
Information Administration of the Department of Energy:
Data in Thousands

Report Period Cost Barrels Average Price

1995 Jul $52,138 3,483 $14.97
Aug $56,636 3,603 $15.72
Sep $53,722 3,356 $16.01
Oct $53,430 3,504 $15.25
Nov $54,576 3,448 $15.83
Dec $57,448 3,346 $17.17

Total $327,950 20,740 $15.81 (Weighted)

Note: December is final this year.

The average oil price to be used to determine oil exemptions for the fiscal period of May 1, 1996 through April 30, 1997 is $15.81
per barrel.

Based on the current law, this price is more than $10.00 and less than $16.00 so the new exemption amounts to apply for this period
are the same as for last year:

West Greater Production
Than 2000 Feet Exempt If
Low Production Six (6) barrels or less
Water Flood Seven (7) barrels or less

Page 2

Please direct any questions you may have to Minerals Tax; 3rd Floor; Docking State Office Building; Topeka, KS 66625-0001.
Telephone Number: 913-296-7713.

Date Composed: 10/07/1997 Date Modified: 10/10/2001

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