Oil and gas producers have to
make a difficult decision when it comes to reporting and paying their
severance taxes. They must decide if it is beneficial to hire
accounting personnel who will file the severance tax returns or have
the purchaser report and withhold from revenue the severance tax
payment and submit it to the state taxing authority.
In an effort to reduce general and administrative
expenses most oil and gas producing companies take the position that
reporting your own taxes does not warrant the added expense of hiring
the personnel to complete the returns. The down side to this approach
is when the purchaser withholds the taxes and pays them they are under
no obligation to seek out and take advantage of severance tax
incentives that would save the oil and gas producer money.
An cost effective alternative to hiring your own
accounting staff to complete your severance tax reporting requirements
is to hire Petroleum Accounting Consultants, PLLC. Our consultants can
complete your severance tax returns and save you money on salary
expense and payroll tax expense. More importantly our consultants are
familiar with the various severance tax incentives offered by oil and
gas producing states and can take advantage of them, which will save
you money on your severance taxes.
