GEM Sales Tax Stack
What is the GEM Sales Tax Stack?
GEM Sales Tax Stack discusses sales and use tax.
Sales tax is composed of resolving the answer to 4 main questions:
- Nexus – What is sales tax nexus? Are you doing something that connects you to a State’s sales tax code?
- Taxibility – What are you selling? Are your sales taxable, nontaxable or exempt?
- Situs – What sales tax rate do I use? What is sales tax situs? Business office, field office, jobsite, wellsite?
- Rates – What is the sales tax rate at the point of sale(See Situs)?
New Sales Tax Info
Flowback services and water transfer services
Ruling December 13, 2023
Flowback services and water transfer services with vendor personnel continuously onsite to regulate or control the operation (not just monitor, maintain, repair, or activate and deactivate) the equipment as needed are nontaxable services. Possession of equipment does not transfer to the operator. https://star.comptroller.texas.gov/view/202312010M?q1=202312010M
Current Tax Info
Texas Sales Tax
Texas Sales & Use and Well Service Tax
Pumping brine
Pumping brine water down tubing to test for tubing leaks is not taxable. Texas Comptroller of Public Accounts STAR System 8502L0638E03
Pumping brine
Pumping brine down the casing, or both to kill well to repair casing is taxable as repair or maintenance to real property in the field. Texas Comptroller of Public Accounts STAR System 8502L0638E03
Pumping brine
Pumping brine water into an oil tank before heating the oil in the tank to remove impurities sot the oil can be sold. Texas Comptroller of Public Accounts STAR System 8502L0638E03
Natural brine water
f) Water. The sales tax law specifically exempts the sale of water, including spring water, sparkling water, or mineral water, from sales or use tax. The exemption includes the sale of bottled water and water that a restaurant or any other food service provider sells. An exemption certificate is not required. Flavored water (carbonated or non-carbonated) is a soft drink and is taxable. See sec. 3.293 of this title (relating to Food; Food Products; Meals; Food Service) for further information on soft drinks. The sale of brine water, other than naturally occurring brine water, is taxable. Texas Tax Code Sections 151.314, 151.315, and 151.355; TAC Rule 3.318.
New Mexico Gross Receipts Tax Info
Casing
Casing is deductible from gross receipts. New Mexico Administrative Code: NMAC 3.2.209.9; New Mexico Tax Code: 7-9-52 NMSA 1978NTTC: Type 6; Deduction Code: 7-9-51
Wellhead
A wellhead purchase is deductible from gross receipts. New Mexico Administrative Code: NMAC 3.2.209.9; New Mexico Tax Code: 7-9-52 NMSA 1978 NTTC: Type 6; Deduction Code: 7-9-51
Drill stem testing
Drill stem testing during drilling is deductible from gross receipts. New Mexico Administrative Code NMAC 3.2.1.11D(1)(i) 7-9-3.4; NMSA 1978 NTTC: Type 6; Deduction Code: 7-9-51
Inspecting drill collars and drill stems
Inspection services that are related to oil and gas construction are deductible from gross receipts. New Mexico Administrative Code NMA 3.2.210.24 7-9-52; NMSA 1978 NTTC: Type 6; Deduction Code: 7-9-51