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Texas oil and gas severance tax calculator
Updated October 28, 2026 · By Ben Tremblay, founder of WellFlint
Short answer: Texas taxes crude oil at 4.6% of market value plus 5/8 of a cent per barrel, and natural gas at 7.5% of market value plus $0.000667 per Mcf. On 1,000 barrels sold at $60, that is $2,760 in oil tax and $6.25 in cleanup fee.
Calculator
Use the price the oil or gas actually sold for. This is an estimate with the standard rates, before any credit or exemption.
Texas production tax rates
| Product | Tax | Per-unit fee | Who pays | Report due |
|---|---|---|---|---|
| Crude oil | 4.6% of market value (2.3% certified enhanced recovery) | $0.00625 per barrel | First purchaser | 25th of the following month |
| Natural gas | 7.5% of market value | $0.000667 per Mcf | Producer, unless the contract says the purchaser | 20th of the second month after production |
| Condensate | 4.6% of market value | None listed | Producer, unless the contract says the purchaser | With the gas report |
What lowers the tax
- Low-producing well credits for oil leases and gas wells when prices are low. The Comptroller certifies the prices that trigger them.
- Two-year inactive well exemption: 0% on oil from a well that had been inactive, once certified by the Railroad Commission.
- Enhanced oil recovery: 2.3% for certified projects.
- High-cost gas and flared gas: reduced or zero rates for certified wells.
Each of these needs certification, usually through the Railroad Commission, before the reduced rate applies.
Checking your check stub
Your purchaser deducts the oil tax before it pays you, so the statement should show tax close to 4.6% of the gross value for each lease. If it is far off, compare the barrels and price on the statement with your run tickets. The run ticket reconciliation guide walks through it.
Common questions
What is the Texas oil severance tax rate?
The Texas crude oil production tax is 4.6% of market value, plus an oil-field cleanup fee of 5/8 of a cent ($0.00625) per barrel. Certified enhanced oil recovery projects pay 2.3%.
What is the Texas natural gas severance tax rate?
The Texas natural gas production tax is 7.5% of market value, plus an oil-field cleanup regulatory fee of $0.000667 per Mcf. Condensate is taxed at 4.6%.
Who pays Texas oil and gas production tax?
For crude oil, the first purchaser pays the tax and reports it to the Comptroller, usually deducting it from what it pays owners. For natural gas, the producer primarily pays, unless the producer and purchaser agree in their contract that the purchaser will.
When are Texas production tax reports due?
Crude oil reports are due the 25th of the month after production, for example April 25 for March. Monthly natural gas reports are due the 20th of the second month after production, for example April 20 for February.
Does this calculator include exemptions and credits?
No. It uses the standard rates. Low-producing well credits, two-year inactive well exemptions, high-cost gas and other reduced rates need certification and change the tax. Check the Comptroller's pages for your wells.
Sources
This calculator is an estimate, not tax advice. The Comptroller's rules are the final word.