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Content Overview

The Texas AP-180 form serves as a critical tool for natural gas producers seeking to obtain a reduced tax rate for high-cost gas wells certified by the Texas Railroad Commission (RRC). This form requires detailed information about the taxpayer, including their name, contact details, and Texas taxpayer number, alongside specific lease information such as the well's depth, API number, and production county. Producers must also disclose drilling and completion costs associated with high-cost gas production, which can include various categories like pre-drilling, drilling, casing, cementing, and completion costs. The form emphasizes the confidentiality of certain drilling and completion costs, aligning with Texas Tax Code regulations. Additionally, it outlines the necessary steps for filing, including the requirement of a certification letter from the RRC and the importance of adhering to specific deadlines to avoid penalties. Producers must ensure that the information provided is accurate and complete, as it plays a pivotal role in determining eligibility for tax credits and exemptions related to high-cost gas production. Understanding the intricacies of the AP-180 form is essential for navigating the complexities of Texas's tax landscape in the natural gas industry.

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AP-180
(Rev.10-13/8)
Request for Approval of Reduced
Tax Rate for High Cost Gas
T Code 00990 1126
Complete this form and mail to:
Comptroller of Public Accounts
P.O. Box 13528
Austin, TX 78711-3528
Taxpayer name, contact person and mailing address
If you have any questions about this form,
please call 1-800-252-1384 or 512-463-4600.
• Do not write in shaded areas. • See instructions on back of form.
You have certain rights under Chapters 552 and 559, Government Code,
to review, request and correct information we have on file about you.
Contact us at the address or phone numbers listed on this form.
Texas taxpayer number
Lease name Name of RRC field in which well is located
Total measured well depth True vertical well depth API number
County of production County code RRC lease number
Texas Railroad Commission (RRC) Lease Information
Well spud date (year and month) Well completion date (year and month)
RRC approval date (mm/dd/yyyy) First date of production (year and month)
Dates
High cost gas was produced as a result of (check one):
designated tight formation completion below 15,000 feet devonian shale
coal seams geopressured brine production enhancement
High Cost Gas Production Information
Name and title of authorized individual (Please type or print) Daytime phone (Area code and number)
Email address
Signature Date
I declare that the information in this document is true and correct to the best of my knowledge and belief.
Declaration
Are you a consultant or service provider?.............................................................. YES NO
(If yes, attach a signed Limited
Power of Attorney to this form.)
Comptroller's Use Only
If applicable, enter eligible percentage rate of the allowable tax credit certified by RRC:
%
Pre-drilling costs ..................................... _______________________
Drilling costs ........................................... _______________________
Casing and cementing ............................ _______________________
Support costs.......................................... _______________________
TOTAL DRILLING COSTS ..................... _______________________
Services .................................................. _______________________
Stimulation .............................................. _______________________
Production equipment............................. _______________________
Support costs.......................................... _______________________
TOTAL COMPLETION COSTS .............. _______________________
Drilling Costs Completion Costs
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Drilling and Completion Costs for High Cost Gas Well
In accordance with Tax Code, Section 201.057(h), drilling and completion costs included on this form are confidential and
may not be disclosed, except to the extent aggregated with other similar information to produce industry averages.
Is well indicated above a stacked lateral well? ............................................................................................................................ YES NO
Is well indicated above a multiple completion well? .................................................................................................................... YES NO
Was this well designated by RRC as a Statewide Rule Exception (SWR-10)? ........................................................................... YES NO
Form AP-180 (Back)(Rev.10-13/8)
General Information
Who Files: Form AP-180 must be filed by any producer seeking a reduced tax rate for gas on gas wells certified as high cost gas wells by the Texas Railroad
Commission (RRC). A Limited Power of Attorney must be included with a completed Form AP-180 whenever a consultant and/or service provider files
Form AP-180 on behalf of a taxpayer.
What is Needed: A copy of a letter of certification from the Texas Railroad Commission must accompany each completed Form AP-180.
When to File: To recoup credits for previously paid tax on approved reduced tax rates for high cost gas leases, the information filed on credit-amended reports
must meet all of the following criteria:
• Four-Year Statute of Limitation: Credit-amended reports must be filed within four years from the due date of a production period.
• Ten Percent Penalty: Form AP-180 must be filed at the later of the 180th day after the date of first production or the 45th day after the date of approval
by the commission. If Form AP-180 is not filed by the applicable deadline, the tax exemption or tax deduction is reduced by 10 percent for the period
beginning on the 180th day after the first day of production and ending on the date on which Form AP-180 is filed with the Comptroller.
• One-Year Window Requirement: Credit-amended reports containing approved exempt high cost gas wells which have production periods that are prior
to the Comptroller’s signature date must be filed by the first anniversary from the Comptroller’s signature date.
• Two-Year Window Requirement: If the application for certification is submitted to the Texas Railroad Commission after Jan. 1, 2004, the total allowable
credit for taxes paid for reporting periods before the date the application is filed may not exceed the total tax paid on the gas that otherwise qualified for the
exemption or tax reduction and that was produced during the 24 consecutive calendar months immediately preceding the month in which the application
for certification was filed with the Texas Railroad Commission.
End Date of Exemption: The end date of an approved exempt high cost gas well is determined by either the earliest of 120 months from the date of first
production or when the cumulative value of the tax savings equal to 50 percent of the total drilling and completion costs, whichever situation occurs first.
How to File Reports: An amended report is required to claim a credit for tax previously paid on an approved reduced tax rate for high cost gas leases. On
natural gas producer and purchaser tax reports, report approved high cost gas leases as “Type 05” with the actual RRC lease number. Scenarios requiring an
amended report are as follows:
• If the actual RRC lease number was previously reported as “Type 02”, credit out volumes and values reported and rebook volumes and values as “Type 05”.
• If no lease data was previously reported, report volumes and values as “Type 05” with the actual RRC lease number.
• If a drilling permit number was previously reported as “Type 02” and the corresponding lease is later approved for the reduced tax rate, credit out volumes
and values and rebook as “Type 05” with the actual RRC lease number. Do not report a drilling permit number when initially reporting a “Type 05” lease.
Comptroller’s Website: Detailed Information on approved reduced tax rate for high cost gas leases is available at: http://window.state.tx.us/taxinfo/nat_gas/index.html.
Click on the link labeled “CONG WEB Inquiry.”
Drilling Costs to be Included by Category
Predrilling - Damage payments to surface owner and any petroleum engineering or geoscience costs associated with the well location are not to be included.
All costs related to surveying, permitting, constructing roads to well sites, including fences and gates, costs to build pad, cellar, concrete pad, rat and mouse
holes, conductor hole and pipe, drilling pit and liner and the cost of any water well. Costs of any environmental surveys performed including any monitoring
wells drilled at or near the wellsite and the preparation of environmental impact study that may be required and any necessary remediation.
Drilling - Day rates or footage costs including general costs associated with normal rig operations. Include rig mobilization, rig positioning and rig demobiliza-
tion charges where applicable. All costs for fuel and power, mud and chemical materials used to drill and condition the hole and/or restore and maintain
circulation and chemical materials such as weighting materials, lost circulation materials, crude oil, diesel oil or mineral oil used in the circulating system.
Also, if applicable, include the cost for air or gas compression if used for drilling. Cost of drill bits used to drill the well from conductor to total depth including
the cost of any diamond drilling bits that are used. Labor, material transportation, services, standby time, tool rentals for setting whipstocks, milling casing
windows, setting casing whipstocks, cement plugs for directional drilling, any special bottomhole assemblies or equipment such as Dynadrills, Turbodrills,
measurement while drilling assemblies and costs, jet deflecting stabilizers, reamers, hole openers and any other items that affect or influence the directional
tendencies of a wellbore. Labor, material and services for mud logging and any drill stem testing during drilling operations. Include test analysis costs where
applicable. Open-hole logging costs including wireline formation tests and inclination and directional survey costs. Costs required to cut and recover cores,
including sidewall cores and core analysis. Costs of rental tools and equipment including BOP’s, drill pipe, drill, collars and bottomhole assemblies, mud
motors, shale shakers, degassers, desanders, desilters and centrifuges.
Casing and Cementing - Cost of casing, float shoes, float collars, and centralizers used in any portion of the casing program including any liners and liner
hangers. Cost of cement, additives and pumping charges for the cement and costs for all plugs.
Support Costs - Costs associated with hauling water, casing or rental equipment to the well site. Costs for special equipment testing. Costs for roustabout
crews. Costs of direct supervision of drilling operations.
Completion Costs to be Included by Category
Services - Rig used in completion operations. If the drilling rig is used for the completion operations, the costs must be separated. All wireline operations
performed in the cased hole, including logging, perforating and setting tools on wireline. Costs of any fluids used in the wellbore (except fluids used during
stimulation) during well operations from the time production casing is cemented until the well is turned to sales. Costs related to testing pay intervals that
cannot be attributed to any other category. Costs for site restoration and for any remediation associated with the completion operations.
Well Stimulation - All costs associated with stimulating the pay interval. This includes acidizing and hydraulic fracturing charges as well as equipment costs
that are specifically related to stimulation operations such as frac tanks. It includes the cost of coil tubing units and operations if used.
Production Equipment - The production tubing string, packers, bridgeplugs, tubing anchors and gravel packing. Any equipment installed on the wellhead
including the wellhead itself. All equipment costs associated with gas lift or rod pumping equipment, including both down hole and surface equipment. Also
included in this category are plunger lift and cavity displacement pumps and associated equipment. All equipment from the wing valve to the sales meter
that is required to produce the well. This includes production, storage and separation equipment, meters, flowlines, chemical pumps and any location costs
such as gates, roads and fences associated with the lease equipment. Drilling and Completion Costs does not include any costs incurred after the outlet of
a lease separator or that would otherwise be considered a marketing cost for severance tax purposes.
Support Costs - Costs to transport materials and equipment to the well site that are not specifically chargeable to other more specific operations. This category
includes hauling casing or tubing to location, but would not include the cost to haul water for a fracture stimulation. Rental equipment used to complete the
well. Costs of roustabout crews used during and after drilling operations have ceased. Costs of direct supervision of completion operations.
➤ PDF File

Form Specifications

Fact Name Fact Description
Form Purpose The Texas AP-180 form is used to request approval for a reduced tax rate for high cost gas wells certified by the Texas Railroad Commission (RRC).
Filing Requirement Producers seeking a reduced tax rate must file Form AP-180. This includes submitting a Limited Power of Attorney if a consultant or service provider files on behalf of a taxpayer.
Confidentiality Clause According to Tax Code, Section 201.057(h), drilling and completion costs reported on this form are confidential and cannot be disclosed except in aggregated form.
Filing Deadline Form AP-180 must be filed within 180 days after the first production date or within 45 days after RRC approval to avoid a 10% penalty.
Required Documentation A letter of certification from the Texas Railroad Commission must accompany each completed Form AP-180.
Exemption Duration The exemption for an approved high cost gas well lasts either for 120 months from the first production date or until the cumulative tax savings equal 50% of total drilling and completion costs.
Online Resources Detailed information about the reduced tax rate for high cost gas leases can be found on the Texas Comptroller's website.
Contact Information For questions regarding Form AP-180, individuals can contact the Texas Comptroller's office at 1-800-252-1384 or 512-463-4600.

Texas Ap 180: Usage Guidelines

Filling out the Texas AP 180 form requires attention to detail and accurate information. After completing the form, you will need to submit it to the Comptroller of Public Accounts along with any necessary supporting documents. Make sure to check for completeness before mailing your application to avoid delays.

  1. Obtain the Texas AP 180 form, ensuring you have the latest version.
  2. Fill in the Taxpayer name, contact person, and mailing address in the designated fields.
  3. Enter your Texas taxpayer number accurately.
  4. Provide Lease Information including the lease name, RRC field name, total measured well depth, true vertical well depth, API number, county of production, county code, and RRC lease number.
  5. Indicate if the well is a stacked lateral well or a multiple completion well by checking the appropriate boxes.
  6. Specify if the well has been designated as a Statewide Rule Exception (SWR-10) by checking yes or no.
  7. Input the dates for well spud, completion, RRC approval, and first production.
  8. In the High Cost Gas Production Information section, check the box that applies to how high-cost gas was produced.
  9. Fill out the Drilling and Completion Costs section by entering the appropriate amounts for pre-drilling costs, drilling costs, completion costs, and support costs.
  10. In the Declaration section, type or print the name and title of the authorized individual, along with their daytime phone number and email address.
  11. Sign and date the form to validate the information provided.
  12. If applicable, attach a signed Limited Power of Attorney if you are a consultant or service provider.
  13. Attach a copy of the letter of certification from the Texas Railroad Commission.
  14. Mail the completed form and attachments to: Comptroller of Public Accounts, P.O. Box 13528, Austin, TX 78711-3528.

Your Questions, Answered

What is the purpose of the Texas AP-180 form?

The Texas AP-180 form is used by gas producers to request a reduced tax rate for gas wells that have been certified as high cost gas wells by the Texas Railroad Commission (RRC). This form allows producers to recoup credits for taxes previously paid on these wells, making it an important document for those in the natural gas industry.

Who needs to file the AP-180 form?

Any producer seeking a reduced tax rate for high cost gas wells must file the AP-180 form. If a consultant or service provider is filing on behalf of a taxpayer, a Limited Power of Attorney must accompany the form. This ensures that the appropriate parties are authorized to handle the tax matters related to the high cost gas wells.

What information is required when filing the AP-180 form?

When completing the AP-180 form, you will need to provide detailed information about the gas well, including the lease name, RRC field name, total measured well depth, and various costs associated with drilling and completion. Additionally, a copy of the certification letter from the Texas Railroad Commission must be submitted with the form.

When should the AP-180 form be filed?

The AP-180 form should be filed within specific time frames to avoid penalties. Generally, it must be submitted within 180 days after the first production date or 45 days after RRC approval. If not filed by these deadlines, the tax exemption could be reduced by 10 percent. Additionally, credit-amended reports must be filed within four years from the due date of a production period to recoup previously paid taxes.

What are the consequences of not filing the AP-180 form on time?

Failure to file the AP-180 form within the required deadlines can result in a 10 percent reduction in the tax exemption or deduction for the period after the 180th day from the first day of production. This emphasizes the importance of timely filing to ensure that producers receive the full benefits of the reduced tax rate.

What types of costs can be included on the AP-180 form?

Costs related to drilling and completion can be included on the AP-180 form. This encompasses pre-drilling costs, drilling costs, casing and cementing expenses, and completion costs. However, it is important to note that marketing costs incurred after the outlet of a lease separator are not included. Detailed categories help ensure that only qualifying expenses are reported.

Where can I find more information about the AP-180 form?

For additional details on the AP-180 form and the reduced tax rate for high cost gas leases, you can visit the Texas Comptroller's website. There, you will find comprehensive information and resources, including links to relevant forms and guidelines.

Common mistakes

  1. Neglecting to Read Instructions: Many individuals overlook the instructions provided on the back of the AP-180 form. This can lead to incomplete or incorrect submissions. Understanding the requirements is essential for a successful application.

  2. Omitting Required Documentation: A common mistake is failing to include the necessary letter of certification from the Texas Railroad Commission. This document is crucial for the approval process, and without it, the application may be rejected.

  3. Incorrectly Reporting Costs: Some applicants miscalculate or misreport drilling and completion costs. It is vital to ensure that all costs are accurately categorized and totaled to avoid discrepancies that could affect the tax rate approval.

  4. Missing Deadlines: The deadlines for filing the AP-180 form are strict. Failing to submit the form within the specified time frames can result in penalties or loss of tax credits. Keeping track of these dates is essential for compliance.

  5. Improper Signature or Authorization: The declaration section requires a signature from an authorized individual. If this section is not completed correctly, or if a consultant files without a Limited Power of Attorney, the application may be invalidated.

  6. Ignoring Shaded Areas: The form contains shaded areas where no information should be entered. Ignoring this guideline can lead to confusion and potential rejection of the application.

Documents used along the form

The Texas AP-180 form is essential for producers seeking a reduced tax rate for high-cost gas wells certified by the Texas Railroad Commission. However, this form often accompanies various other documents that provide necessary information or support for the application process. Below is a list of commonly used forms and documents that can enhance or complement the AP-180 filing.

  • Limited Power of Attorney: This document allows a consultant or service provider to act on behalf of the taxpayer when filing the AP-180. It must be signed and submitted with the AP-180 if a third party is involved in the filing process.
  • Letter of Certification from the Texas Railroad Commission: A crucial document that certifies the well as a high-cost gas well. This letter must accompany the AP-180 to validate the request for a reduced tax rate.
  • Amended Tax Reports: These reports are required to claim credits for previously paid taxes on approved reduced tax rates. They must be filed within specific timeframes to avoid penalties.
  • Production Reports: Producers need to submit these reports to detail the amount of gas produced from the well. Accurate reporting is essential for tax calculations and compliance.
  • Well Completion Report: This document provides detailed information about the completion of the well, including production capabilities and any issues encountered during the process.
  • Drilling Permit Application: Before drilling can commence, this application must be filed and approved. It contains information about the proposed drilling operations and ensures compliance with regulations.
  • Environmental Impact Assessment: Depending on the location and nature of the drilling, an assessment may be required to evaluate the potential environmental impacts of the drilling operations.
  • Cost Breakdown Report: This report details all drilling and completion costs associated with the high-cost gas well. It provides transparency and supports the claims made in the AP-180.
  • Tax Credit Application: If applicable, this application is necessary for claiming any tax credits related to the operations of high-cost gas wells.
  • Compliance Documentation: This includes any necessary forms or reports that demonstrate compliance with state and federal regulations throughout the drilling and production process.

In summary, the Texas AP-180 form is part of a broader set of documents that together ensure compliance and facilitate the process of securing tax reductions for high-cost gas wells. Understanding the role of each document helps producers navigate the complexities of tax filings and regulatory requirements more effectively.

Similar forms

The Texas AP-180 form is a critical document for producers seeking a reduced tax rate for high-cost gas wells. Several other forms share similarities with AP-180, particularly in terms of purpose, required information, and the context in which they are used. Here’s a list of nine documents that are similar to the Texas AP-180 form:

  • Texas AP-201: This form is used for reporting the production of oil and gas. Like AP-180, it requires detailed information about the well and production costs, ensuring compliance with state tax regulations.
  • Texas AP-175: This form is related to the application for a reduced tax rate for certain oil and gas operations. It mirrors AP-180 in its focus on tax reductions and requires similar supporting documentation.
  • Texas RRC Form G-1: Used for reporting gas production, this form collects data on production volumes and costs. Its goal is to ensure accurate reporting, much like the AP-180's intent for high-cost gas wells.
  • Texas RRC Form P-5: This is a certificate of compliance for operators in Texas. It shares the requirement for detailed operational information, ensuring that operators meet state regulations, akin to the AP-180's compliance needs.
  • Texas AP-167: This form is for reporting certain exemptions for oil and gas producers. Similar to AP-180, it requires producers to provide comprehensive details about their operations to qualify for tax benefits.
  • Texas AP-192: This form is utilized for reporting the production of natural gas from coal seams. It parallels AP-180 in its focus on specific production types and the associated tax implications.
  • Texas AP-155: This form is used for the application of exemptions for certain drilling costs. Like the AP-180, it requires a detailed breakdown of costs and the purpose of the drilling activities.
  • Texas RRC Form G-2: This form is for reporting gas well completions. It requires similar well-specific information as AP-180, focusing on the completion aspects of gas production.
  • Texas AP-160: This form is related to the request for a tax credit for certain oil and gas operations. It is similar to AP-180 in that it addresses tax credits and requires a declaration of accuracy regarding the information provided.

Each of these forms plays a vital role in the regulatory landscape of Texas oil and gas production, ensuring compliance and facilitating the appropriate tax considerations for producers.

Dos and Don'ts

When filling out the Texas AP 180 form, there are several important dos and don'ts to keep in mind. Here’s a helpful list to guide you through the process:

  • Do read the instructions on the back of the form carefully before starting.
  • Do provide accurate and complete information in all sections.
  • Do include a copy of the certification letter from the Texas Railroad Commission with your submission.
  • Do ensure that the form is mailed to the correct address: Comptroller of Public Accounts, P.O. Box 13528, Austin, TX 78711-3528.
  • Do keep a copy of the completed form for your records.
  • Don’t write in the shaded areas of the form.
  • Don’t forget to check the appropriate boxes regarding well type and production information.
  • Don’t submit the form without the required Limited Power of Attorney if you are a consultant or service provider.
  • Don’t miss the filing deadlines, as late submissions can result in penalties or reduced credits.

By following these guidelines, you can help ensure that your submission is processed smoothly and efficiently. Remember, accuracy and attention to detail are key when dealing with tax forms.

Misconceptions

Understanding the Texas AP-180 form is crucial for producers seeking tax reductions on high-cost gas wells. However, several misconceptions can lead to confusion. Here are five common misunderstandings about this form:

  • The AP-180 form can be filed by anyone. In reality, only producers certified by the Texas Railroad Commission (RRC) can submit this form. It must be completed by the actual gas well producer or an authorized representative.
  • Filing the AP-180 form is optional. This is not true. Filing is necessary for producers who want to benefit from reduced tax rates on high-cost gas. Without it, they may miss out on significant tax savings.
  • All costs related to drilling and completion can be claimed. This is a misconception. Only specific costs outlined in the guidelines can be included, such as drilling costs, completion costs, and certain support costs. Costs related to marketing or incurred after the lease separator are not eligible.
  • The deadline for filing the AP-180 is flexible. This is incorrect. There are strict deadlines for filing, including penalties for late submissions. Producers must adhere to the specified timeframes to avoid losing tax benefits.
  • Once approved, the reduced tax rate lasts indefinitely. This is misleading. The approval for a reduced tax rate has an expiration based on specific conditions, such as the cumulative value of tax savings or a maximum duration from the date of first production.

Being aware of these misconceptions can help producers navigate the complexities of the Texas AP-180 form more effectively. Understanding the requirements and limitations is essential for maximizing tax benefits in the oil and gas industry.

Key takeaways

Here are some key takeaways about filling out and using the Texas AP-180 form:

  • Who Should File: Producers seeking a reduced tax rate for high cost gas wells must file Form AP-180.
  • Consultants: If a consultant files on behalf of a taxpayer, a Limited Power of Attorney must be attached.
  • Required Documentation: A letter of certification from the Texas Railroad Commission is needed with the completed form.
  • Filing Deadlines: Be aware of the four-year statute of limitations for credit-amended reports.
  • Penalties: Filing late can result in a 10 percent penalty on tax exemptions or deductions.
  • Production Dates: Accurate dates for spud, completion, and first production are crucial.
  • Cost Categories: Clearly categorize drilling and completion costs to avoid confusion.
  • End Date of Exemption: Understand that the exemption ends either after 120 months or when tax savings equal 50% of costs.
  • Amended Reports: Use “Type 05” to report approved high cost gas leases in tax reports.

Following these guidelines will help ensure a smoother process when using the Texas AP-180 form.