The purpose of the proposed changes to Rule Chapter 12B-7, F.A.C. (Severance Taxes, Fees, and Surcharges), is to: (1) repeal unnecessary definitions of terms; and (2) adopt, by reference, changes to forms used in the administration of the severance ...

 

DEPARTMENT OF REVENUE
Miscellaneous Tax

RULE NOS.:RULE TITLES:
12B-7.003Definitions
12B-7.004Rate of Tax; Oil, Gas and Sulfur
12B-7.008Public Use Forms
12B-7.022Definitions
12B-7.026Public Use Forms
PURPOSE AND EFFECT: The purpose of the proposed changes to Rule Chapter 12B-7, F.A.C. (Severance Taxes, Fees, and Surcharges), is to: (1) repeal unnecessary definitions of terms; and (2) adopt, by reference, changes to forms used in the administration of the severance taxes, fees, and surcharges.
SUMMARY: The proposed repeal of Rule 12B-7.003, F.A.C. (Definitions), and Rule 12B-7.022, F.A.C. (Definitions), removes unnecessary definitions of terms for which statutory definitions are provided or terms that are no longer used in the administration of the tax on the production of oil, gas, or sulfur or on the severance of solid minerals, heavy minerals, or phosphate rock.
The proposed amendments to Rule 12B-7.004, F.A.C. (Rate of Tax; Oil, Gas and Sulfur), provide for the reporting of the tax on the production mature field recovery oil, imposed by Section 211.02, F.S., as amended by Section 6, Chapter 2012-32, L.O.F.
The proposed amendments to Rule 12B-7.008, F.A.C. and Rule 12B-7.026, F.A.C. (Public Use Forms), adopt changes to tax returns used in the administration of the tax on oil production in Florida.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:
The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.
The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: 1) no requirement for the Statement of Economic Regulatory Costs (SERC) was triggered under Section 120.541(1), F.S.; and 2) based on past experiences with activities for removing obsolete provisions and updating forms used to report severance taxes, and rules of this nature, the adverse impact or regulatory cost, if any, do not exceed nor would exceed any one of the economic analysis criteria in a SERC, as set forth in Section 120.541(2)(a), F.S.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 211.075(2), (3), 211.125, 211.33(1), (6), 213.06(1), 373.41492(4)(b), 1002.395(13) FS.
LAW IMPLEMENTED: 92.525(1)(b), (2), (3), (4), 211.01, 211.02, 211.025, 211.0251, 211.026, 211.04, 211.06, 211.075, 211.076, 211.125, 211.30, 211.31, 211.3103, 211.3106, 211.33, 212.11(1)(b), 212.12(2), 212.17(1)(c), 213.235(2), 213.255, 213.37, 213.755(1), 215.26, 373.41492, 1002.395 FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE,TIME AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):
DATE AND TIME: January 29, 2013, 1:30 p.m.
PLACE: 2450 Shumard Oak Boulevard, Building One, Room 1220, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Tammy Miller at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Janet Young, Tax Law Specialist, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]

THE FULL TEXT OF THE PROPOSED RULE IS:

12B-7.003 Definitions.

Rulemaking Specific Authority 211.125(1), 213.06(1) FS. Law Implemented 211.01, 211.125 FS. History-New 12-28-78, Formerly 12B-7.03, Amended 12-18-94, Repealed________.

 

12B-7.004 Rate of Tax; Oil, Gas and Sulfur.

(1) Oil.

(a) The amount of tax is shall be measured by the value of oil produced and saved. The rate for oil shall be 8 percent of the gross value thereof at the point of production.

(b) All wells capable of producing less than 100 barrels of oil per day is shall be taxed at the rate of 5 percent of the gross value at the point of production.

(c) Oil produced by tertiary methods and mature field recovery oil is shall be taxed at the following tiered rates on the gross value at the point of production:

1. 1 percent of the gross value of oil $60 and below;

2. 7 percent of the gross value of oil above $60 and below $80;

3. 9 percent of the gross value of oil $80 and above.

4. Example: 200 barrels of oil were produced that had a value of $90 per barrel at the time of production. Tax is calculated as follows:

First Tier:200 barrels x $60 x 1% = $120

Second Tier:            +  200 barrels x $20 x 7% = $280

Third Tier:            +  200 barrels x $10 x 9% = $180

Total Tax Due:           $580

(d) Escaped Oil. When a regular monthly report required from a taxpayer does not disclose the actual source of any taxable oil, but does show such oil to have escaped from a well or wells and to have been recovered from streams, lakes, ravines, or other natural depressions, the tax rate is 12 1/2 percent of the gross value of such escaped oil and is in addition to the tax imposed upon oil production.

(2) Gas. The amount of tax is shall be measured by the volume of the gas produced and sold, or used. The rate for gas for each state fiscal year (July through June) is shall be the gas tax rate established by the Department pursuant to Section 211.025, F.S., for the fiscal year.

(3) Sulfur. The amount of tax is shall be measured by the volume of the sulfur produced and sold, or used. The rate for sulfur for each state fiscal year (July through June) is shall be the sulfur tax rate established by the Department pursuant to Section 211.026, F.S., for the fiscal year.

Rulemaking Authority 211.125(1), 213.06(1) FS. Law Implemented 211.02, 211.025, 211.026, 211.04 FS. History-New 12-28-78, Formerly 12B-7.04, Amended 12-18-94, 1-11-10, ________.

 

12B-7.008 Public Use Forms.

(1)(a) The following forms and instructions are used by the Department in its administration of the taxes imposed on the production of oil, gas, and sulfur. These forms are hereby incorporated by reference in this rule.

(b) No change.

Form Number                            Title                                                                                                  Effective Date

(2) DR-144Gas and Sulfur Production Quarterly Tax Return

(R. 07/12 07/11)     01/12

(http://www.flrules.org/Gateway/reference.asp?No=Ref- ____ 00824)

(3) DR-144ESDeclaration of Estimated Gas and Sulfur Production

Tax (R. 07/12 07/11)     01/12

(http://www.flrules.org/Gateway/reference.asp?No=Ref- ____ 00824)

(4) DR-145                            Oil Production Monthly Tax Return

                                          (R. 07/12 01/11)                                                                                         01/11

(5) DR-145X                            Oil Production Monthly Amended Tax

                                          Return (R. 07/12 01/11)                                                                           01/11

Rulemaking Authority 211.075(2), (3), 213.06(1), 1002.395(13) FS. Law Implemented 92.525(1)(b), (2), (3), (4), 211.02, 211.0251, 211.026, 211.06, 211.075, 211.076, 211.125, 213.255, 213.755(1), 215.26, 1002.395 FS. History-New 12-28-78, Formerly 12B-7.08, Amended 12-18-94, 5-4-03, 10-1-03, 11-6-07, 1-27-09, 1-11-10, 1-12-11, 1-25-12, ________.

 

12B-7.022 Definitions.

Rulemaking Authority 211.33(6), 213.06(1) FS. Law Implemented 211.30, 211.31, 211.3103, 211.3106 FS. History-New 9-17-80, Formerly 12B-7.22, Amended 12-18-94, Repealed________.

 

12B-7.026 Public Use Forms.

(1)(a) The following forms and instructions are used by the Department in its administration of the taxes and surcharge imposed on the severance of solid minerals, phosphate rock, or heavy minerals from the soils and waters of this state. These forms are hereby incorporated by reference in this rule.

(b) No change.

Form NumberTitleEffective Date

(2) DR-142                            Solid Mineral Severance Tax Return (R. 01/13 01/12)                            ___ 01/12

                                          (http://www.flrules.org/Gateway/reference.asp?No=Ref-___ 00825)

(3) DR-142ES                            Declaration/Installment Payment of Estimated Solid

                                          Mineral Severance Tax (R. 01/13 01/12)                                          ___ 01/12

                                          (http://www.flrules.org/Gateway/reference.asp?No=Ref-___ 00825)

Rulemaking Authority 211.33(1), (6), 213.06(1), 1002.395(13) FS. Law Implemented 92.525(2), 211.0251, 211.30, 211.31, 211.3103, 211.3106, 211.3108, 211.33, 213.255, 213.755(1), 215.26, 1002.395 FS. History-New 12-18-94, Amended 10-4-01, 5-4-03, 10-1-03, 11-6-07, 1-27-09, 1-11-10, 1-12-11, 1-25-12, ________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Janet Young, Tax Law Specialist, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone].
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Governor and Cabinet
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: December 11, 2012
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: A Notice of Proposed Rule Development was published in the Florida Administrative Weekly on July 20, 2012 (Vol. 38, No. 29, pp. 2907 - 2908), to advise the public of the proposed changes to Rule Chapter 12B-7, F.A.C. (Severance Taxes, Fees, and Surcharges), and to provide that, if requested in writing, a rule development workshop would be held on August 8, 2012. No request was received by the Department. No written comments were received by the Department.