OAR 150-324-0035: Credit for or Refund of Ad Valorem Taxes Paid

(1) Certain ad valorem taxes paid must be allowed as a credit against the production tax imposed. ORS 324.090 identifies those properties whose ad valorem tax may qualify for credit. The termination point for qualifying machinery, appliances, and equipment is the discharge valve at a producing well. (2) Ad valorem taxes paid must be prorated and claimed as credits equally over the calendar quarters of the ad valorem tax year for which returns are filed. (3) Parties that may claim a credit for qualifying ad valorem taxes paid on the quarterly production tax return are: (a) The purchaser, (b) The producer in the event that gas is not sold at the time of production, or (c) Other agent acting on behalf of any or all purchasers. (4) The credit claimed for a calendar quarter is limited to the lesser of either: (a) The production tax due for the quarter; or (b) The ad valorem tax paid for the quarter of production on the qualified property used in production, plus any credit carry forward in the same tax year. (5) Claims for credit must be supported by sufficient data to identify the property upon which the ad valorem tax was levied and the amount of tax on each property. (a) Interest or other costs resulting from ad valorem tax delinquencies are not allowable credits. (b) The department will make whatever review is necessary to validate ad valorem tax credits claimed. (6) It is the responsibility of the producer to ensure that the entity preparing the quarterly natural gas production tax return is informed on a timely basis of the ad valorem tax credit to be claimed and that data in support of the credit claimed is available for filing with the return. (7) Any adjustment to the amount of credit claimed will be made by refund of tax paid or collection of additional tax. (8) Credit for ad valorem tax will not be allowed for any calendar quarter for which production tax has not been paid. (9) Carry forward of credit or refund deficiencies, if any, resulting from insufficient production will not be allowed beyond the ad valorem tax year.