HB11-1125: Oil & Gas Severance Tax - Point of Taxation

• Shifts the point of taxation for Colorado's oil and gas severance tax from all interest holders to producers (those responsible for management and day-to-day well operations) effective January 1, 2012.

• Producers remain liable for paying estimated severance taxes monthly, but are no longer required to withhold tax and make payments to the state on behalf of interest owners.

• Interest owners who take production in kind from a producer become responsible for paying severance tax on that production.

• Defines "producer" as a person responsible for the management and day-to-day operation of an oil and gas well, and allows a producer to claim ad valorem tax credits regardless of whether the producer paid the property tax.

• Establishes exemptions for small producers (oil wells producing 15 barrels per day or less, gas wells producing 90,000 cubic feet or less per day) and implements a progressive tax rate structure ranging from 2% to 5% based on gross income.