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Severance Tax

About the Tax

The Michigan Severance Tax Act, MCL 205.301, levies a tax on oil and gas severed from the soil in Michigan. Producers or purchasers are required to report the oil and gas production, and the value, in a monthly return. Michigan severance tax returns must be filed monthly, by the 25th of the month following the production. Returns not filed timely are subject to the late filing penalty and interest provisions of the Michigan Revenue Act, MCL 205.1 et seq

2024 Current Year Fee

2024 Oil & Gas Fee is set at .74% (0.0074)

2024 Oil and Gas Fee Notice

Oil & Gas Fee

 Tax Year Fee 
2023 1.00 % of gross cash market value
2022 1.00 % of gross cash market value
2021 1.00 % of gross cash market value
2020 1.00 % of gross cash market value

Tax Rates

 Resource Resource Type Tax Rate 
Oil Oil Condensate 6.6% of gross cash market value
Marginal/Stripper Oil Well Oil Condensate 4% of gross cash market value
Gas Gas
Natural Gas Liquids
5% of gross cash market value

Severance Tax Related Revenue Administrative Bulletins (RABs)

RAB Number Title
1989-13 Native Gas
1989-14 Filing Severance Tax Returns
1989-16 Liability of Common Purchaser
1989-17 Liability – Audit Deficiencies
1989-20 Lease Use Gas Taxability
1992-6 Severance Taxation of Gas Used in Gas Injection
1992-8 Lower Severance Tax Rate on Marginal and Stripper Oil and Liquid Phase Condensate Production
2019-23 Allowable Marketing Cost Deductions to Severance Tax on Natural Gas