CO HB1468

Restricts deductible costs for calculating net amount realized from oil and gas sales to only "direct costs actually paid" by the taxpayer for transporting, manufacturing, and processing identifiable, measurable oil or gas.

Defines the deductible period as costs from the point where oil or gas is first identifiable and measurable to the sales point or where value is established.

Clarifies that compression downstream of the meter or measurement point is deductible as transportation, while "gathering" (movement of unseparated bulk production to initial separation point) is not deductible as transportation.

Specifies that the definition does not affect the legal relationship between royalty owners and lessees, and allows department of revenue to define "related parties" for purposes of establishing comparable arms-length sales pricing.

Takes effect 90 days after final adjournment of the general assembly (August 10, 2016, if adjournment is May 11, 2016), subject to voter approval if a referendum petition is filed, and applies to severance tax years beginning on or after January 1, 2016.