Ohio Changes Taxation of Oil and Gas Reserves
From Vorys: The Ohio Tax Commissioner recently issued a memorandum to county auditors regarding significant changes to the taxation of oil and gas reserves starting in tax year 2016. These significant changes include: Elimination of filing forms 6 and 6A. Values will now be based upon production volumes reported to the Ohio Department of Natural Resources (ODNR). After hearing from industry representatives, the Ohio Tax Commissioner acknowledged that this approach may lead to higher values than statutorily permitted in some circumstances. Accordingly, the Ohio Tax Commissioner announced a temporary fix to address this circumstance. The new approach will overvalue oil and gas reserves in some circumstances because amounts reported to ODNR are produced amounts, whereas O.R.C. 5713.051 requires that values be based on volumes “produced and sold.” The temporary fix is re-instatement of DTE form 6A for the limited purpose of ensuring that producers will be permitted to challe