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- The State of Louisiana collects a severance tax on all the oil and gas produced in Louisiana including oil and gas produced on private lands as well as public lands and water bottoms.
- The state collects no severance from production in federal waters in the Gulf which start three miles from the Louisiana coast line.
- Oil and gas collections account for almost 92 percent of all severance tax collections.
- Severance tax is paid by the owners of the natural resources at the time of severance.
Louisiana Severance Tax Rates
Oil Severance Tax Rates
- Oil Full Rate = 12.5%
- Incapable Oil Rate = 6.25%
- Stripper Oil Rate = 3.125%
- Reclaimed Oil Rate = 3.125%
- Condensate Rate = 12.5%
Gas Severance Tax Rate
- Gas Full Rate = 16.4 cents per MCF (through June 30, 2012)
Ad Valorem Tax
- A tax levied on the value of property. Literally the term means “according to value.”
- The Louisiana Constitution exempts the oil and gas contained in the earth from ad valorem taxes. However, upstream equipment, refineries, pipelines, drilling rigs, oilfield services equipment, and other oilfield related property are taxable.