Bill > HB600

This bill modifies Louisiana's severance tax rates for oil production, introducing a tiered system based on well characteristics and age. For wells completed before July 1, 2025, the severance tax rate remains at 12.5%, but for wells completed on or after that date, the rate will decrease to 6.5%. The bill provides special reduced tax rates for specific types of wells: incapable wells (producing less than 25 barrels per day with over 50% salt water) will be taxed at 6.25%, and stripper wells (producing less than 10 barrels per day) will be taxed at 3.125%. Additionally, the bill offers even lower tax rates for wells that have been inactive for two or more years or designated as orphan wells, with rates ranging from 1.565% to 6.25% depending on the specific circumstances and the date of recommencing production. These reduced rates are designed to incentivize the reactivation of marginal or inactive oil wells and will be applicable for a period of ten years from the recommencement of production, with the provision specifically applying to production starting before or on October 1, 2028. The bill will take effect on July 1, 2025, providing a clear timeline for implementation of these new tax rates.

Budget and Finance

https://www.legis.la.gov/legis/BillInfo.aspx?s=25rs&b=HB600&sbi=y