Crude oil produced from oil wells classified as stripper or marginal may use the lower tax rate of 4% of gross cash market value.
| Stripper Well Crude Oil |
Oil produced and sold from a property whose maximum daily average production of crude oil per well during any consecutive 12-month period does not exceed 10 barrels. |
| Marginal Property Crude Oil |
A “property” whose daily average production (excluding condensate recovered in non-associated production) per well during any preceding consecutive 12-month period that did not exceed the number of barrels shown in the following table for the average completion depth. |
| |
| Average Completion Depth in Feet |
Barrels Per Day |
| 2,000 or more, but less than 4,000 |
20 or less |
| 4,000 or more, but less than 6,000 |
25 or less |
| 6,000 or more, but less than 8,000 |
30 or less |
| 8,000 or more |
35 or less |
|
To receive approval for “Marginal/Stripper” status, provide the Michigan Department of Treasury with the following information:
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Name, FEIN, and address of producer of wells
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Name, FEIN, and address of company remitting tax/submitting tax return (if different from producer of wells)
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Name of the well
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Permit number and PRU number
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Well Depth
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Production figures for 12 consecutive months
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Verification that well was producing at full capacity
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Copies of original returns
The Department will review information and respond in writing.
| Mail Correspondence to: |
Michigan Department of Treasury
Bureau of Tax Policy, Severance Tax
P.O. Box 30474
Lansing, MI 48909-7974 |
